PRIVATE BUSINESS

Transas Group Bill (By Order)

Order for Second Reading read.
	To be read a Second time on Wednesday 12 March.

Oral Answers to Questions

OFFICE OF THE DEPUTY PRIME MINISTER

The Deputy Prime Minister was asked—

Housing Licences

Brian Iddon: When he plans to bring forward legislation to license (a) rogue landlords and (b) houses in multiple occupation.

Tony McNulty: As announced in the Queen's Speech, the Government intend to publish a draft housing Bill this Session. The Bill will, among other measures, include powers for local authorities to license landlords in areas of low demand and introduce the mandatory licensing of houses in multiple occupation. Following consultation on and pre-legislative scrutiny of the draft Bill, the Government intend that it should be introduced to Parliament at the earliest possible opportunity.

Brian Iddon: That, of course, is good news, but what help can my hon. Friend give local authorities such as Bolton metropolitan borough council, the regeneration schemes of which are often blocked by non-compliant landlords, whose houses in multiple occupation attract prostitutes and their associated drug dealers?

Tony McNulty: I fully appreciate my hon. Friend's concerns. We have made it clear that, before the housing Bill is introduced, we will introduce pilot projects from June 2003 to help local authorities tackle the problems as effectively as possible, using the portfolio of existing powers under legislation. I am happy to tell my hon. Friend that the Office of the Deputy Prime Minister is engaged in serious negotiations with Bolton metropolitan borough council to ensure that it is one of the five pilots.

Andrew Robathan: Will the Deputy Prime Minister or any other Minister have to make a declaration under the ministerial code of conduct if such a Bill is introduced?

Tony McNulty: As ever, the hon. Gentleman continues to bore the House, and the answer is no.

Joan Walley: We have exactly the same problems in Stoke-on-Trent. This legislation cannot come quickly enough, as we have neighbourhoods that are being blighted by the activities of absentee landlords. Will my hon. Friend look favourably on a pilot project in Stoke-on-Trent, so that we can take action in advance of the legislation?

Tony McNulty: I welcome my hon. Friend's welcome of the housing Bill. We have spoken before about the difficulties in Burslem and Stoke, and I will happily carry on talking to her specifically about how regeneration, housing and low demand fit together across a range of projects.

Housing (South Swindon)

Julia Drown: What steps he is taking to ensure that there is adequate affordable housing in South Swindon.

John Prescott: The Government have provided £6.5 million via the Housing Corporation for an accelerated housing development programme in Swindon that has delivered some 650 affordable homes since 1999, including a 46-unit scheme for key workers, Isambard House. Clearly, there is a lot more to do, which is what our statement on sustainability, recently made to the House, is designed to achieve.

Julia Drown: I am grateful to my right hon. Friend for that reply. A serious need exists for more affordable housing in Swindon, yet developers object even to providing the Government's minimum—that 30 per cent. of homes must be affordable—and say that it is an unjustified and onerous demand and contrary to Government circular 6/98. A fear also exists that asking for more than 30 per cent. will put off developers from making any proposal. Will my right hon. Friend make it clear that we should listen to people on housing waiting lists, and not to developers making spurious objections? Given that places such as London and Oxford are going for 50 per cent. affordable homes—

Mr. Speaker: Order.

John Prescott: I sympathise with a number of my hon. Friend's points. There is a clear need for more affordable homes, but unfortunately it was not achieved in the recent planning for housing in her area. She will well appreciate, however, that the private and the public sectors negotiate the proportion of social housing or affordable homes within a planned development: it is not set at 30 per cent. The Mayor of London has suggested 50 per cent. or 30 per cent., and we are discussing how we might maximise the proportion of affordable homes.

David Davis: The Deputy Prime Minister has in the past stated his belief that shortages of low-cost social housing are caused by the actions of property companies abusing the right-to-buy scheme. As a result, he has proposed to cut discounts available to council tenants throughout the south of England. That does not yet include Swindon—it has a local election in May, which I am sure is not relevant—but, undoubtedly, if housing pressure continues, it will do so. Will he explain how this discount reduction will stop right-to-buy abuses in property companies?

John Prescott: Our study of abuses of the right to buy identified 42 areas in which we wish to apply the reduction in the discount. In those areas, particularly one or two in London, the huge discount attracted a number of people to offer to buy with the local authorities or to buy on behalf of the tenant, with the local authority, to take advantage of selling at a higher price later. That is what we have discovered in our surveys, and that is why we have reduced the discount.

David Davis: Interestingly, the Deputy Prime Minister referred to a study because, before he began his latest attack on the right to buy, the Government commissioned a report from Heriot-Watt university on the supposed abuses of the policy. The report was supposed to be published in January, but it has not yet been formally released. We now know why. It shows that council tenants use property companies because they cannot get a mortgage on their house or flat. It should be obvious to anyone with even limited financial acumen that, for poor families, the lower the discount, the harder it is to get a mortgage. Therefore, the effect of cutting the maximum discount first from £50,000 to £38,000 and now to £16,000 will be to drive many poor people into the arms of property companies—the opposite of what the right hon. Gentleman says he intends. Will he now reconsider this policy, which will not make available any more houses and will harm the interests of all council tenants and the least well off in our society?

John Prescott: I am not aware that that is a problem in Swindon, but I can tell the right hon. Gentleman that, in the 42 areas that we have identified and in respect of which we will lay an order tomorrow, more people have applied to take advantage of the schemes that I have proposed for reducing the discounts.
	I must apologise. I thought that the Heriot-Watt report had been published, but I am now advised that it will come out tomorrow with the statutory instrument.

Regional Government

Ian Liddell-Grainger: If he will make a statement on regional government in the south-west.

John Prescott: The Office of the Deputy Prime Minister asked for responses by 3 March from the south-west and the other English regions outside London on the level of interest in holding a referendum for an elected regional assembly. We are now evaluating the responses.

Ian Liddell-Grainger: The south-west area multi-modal study—the SWARMMS report—is now slopping around in the south-west, but it is doing nothing for my constituency or for that of my hon. Friend the Member for Taunton (Mr. Flook). An unelected, unaccountable regional assembly is administering it. When will the Deputy Prime Minister take the report back under control, so that it will bring benefits to the south-west?

John Prescott: I think that the regional assemblies have been quite successful. [Laughter.] I take as one indication of that the active participation of Tory councillors on the assemblies. In fact, more than 160 Tory councillors sit on the boards. They think that they are doing a good job, and we will retain them. No doubt the referendum will provide people with a good opportunity to state whether they want to go further and have a regional referendum. The indications are that well over 60 per cent. of people in the south-west want to have a referendum.

Jim Knight: I am keen to make the regional assembly for the south-west accountable through the introduction of an elected regional assembly, but there is some concern in the region, which is fuelled by the Conservative party, that that may spell the end of the shire counties. Will my right hon. Friend confirm that the Government are neutral about whether county councils could form the basis of unitary authorities following the introduction of regional government?

John Prescott: We have made it clear that we do not want three layers of administration. If people in a region choose to have a referendum, they will decide in that referendum whether they want regional government. Before they make that decision, they will receive an indication on what type of local government structure will apply. The local government body will consider the matter and recommend whether and how the unitary authority system will operate alongside regional government. If people vote for that, clearly the county council structure, as we know it, will change.

Hugo Swire: In the event of the eminently sensible people of the south-west wishing to have nothing to do with an elected regional assembly, will the Deputy Prime Minister enact a framework by which we can get rid of the unelected regional assembly and return the money that it spends to the taxpayers of the south-west? [Interruption.]

Mr. Speaker: Order. There is too much conversation in the Chamber, which is unfair.

John Prescott: If the people of a region choose to have a referendum and then reject the idea of regional government, it is clear that the concept will not apply. It will be a decision for people in the region. On the question of whether the assembly that is in place at present would remain, it is my judgment that it should, along with the regional development agency. I note that the hon. Gentleman did not ask for the abolition of the regional development agency.

High-performing Councils

Linda Perham: What additional freedoms and flexibilities he plans to make available to high-performing councils.

Nick Raynsford: Last November, the Office of the Deputy Prime Minister published detailed proposals for extending freedoms and flexibilities to local government in the context of the comprehensive performance assessment. Those authorities categorised as excellent will enjoy substantially less ring-fencing, a dramatic reduction in obligations to produce plans, a three-year inspection holiday and participation in the innovations forum, which will explore new ways of delivering better public services.

Linda Perham: I thank my right hon. Friend for that reply. Sadly, my Tory-run local authority, the London borough of Redbridge, will be unable to take advantage of those freedoms and flexibilities because it has been criticised by the Audit Commission for patchy achievement against five budget priorities. What action will he take to ensure that councils that have had their weaknesses identified and are setting a very high council tax despite receiving above-inflation Government grant receive clear advice and support so that there is better financial management of their budgets in future?

Nick Raynsford: I assure my hon. Friend that the purpose of the comprehensive performance assessment is to encourage improvement in the performance of local authorities. We have put arrangements in place to assist authorities with capacity building and a series of other measures that are designed to tackle weaknesses. I am sure that her authority will benefit from that in the same way as other authorities that have had disappointing results from the comprehensive performance assessment.

James Clappison: Is the Minister aware that Hertfordshire county council received the highest score on comprehensive performance from the Audit Commission under the exercise carried out at the behest of his Department, yet it received the lowest increase in grant of any county council? Council tax payers in Hertfordshire face an increase of 18 per cent. as a result of the Government's scandalous treatment of the south-east. Does that not show that, whether it is local government services or university admissions, this Government punish excellence in the name of cack-handed socialism?

Nick Raynsford: I am surprised that the hon. Gentleman can say that with a straight face, because he was a Minister in the Department in the last years of the Conservative Government. During that period, grants to local government were cut by 7 per cent. in real terms. That was his record. Hertfordshire county council has received an increase of 3.9 per cent. from this Government. That is Labour putting money in, whereas the Tories threaten cuts.

Geraint Davies: Do the flexibilities that my right hon. Friend is considering include discretion over passporting of expenditure and the ability of councils to borrow, as with the new ideas for foundation hospitals?

Nick Raynsford: My hon. Friend's authority, which had a good assessment in the comprehensive performance process, can expect to benefit from significant freedoms. I am pleased that its discussions with my right hon. Friend the Secretary of State for Education and Skills have produced an amicable and satisfactory outcome. I am sure that the authority will want to continue to drive forward the excellent services that it has prided itself on delivering in Croydon.

Edward Davey: New freedoms are welcome, but does the Minister realise that by threatening to cap councils the Government have egg on their face yet again, because in opposition they opposed Conservative capping? Are the record council tax rises the fault of this Government, with their control-freak approach to local authorities, whereby Ministers ring-fence much of the grant money? Rather than capping, would it not be much fairer to put a small income tax rise on the very wealthy and cut council tax bills by £100?

Nick Raynsford: We have ended the crude and universal capping that the previous Government adopted. Would the hon. Gentleman ignore entirely a 55 per cent. council tax increase by an authority that cut its council tax by 25 per cent. in an election year? Would he do nothing about that? The Government believe that it is right to take a responsible approach to council tax. We are giving extra freedoms and flexibilities to local government, but we also believe it is right that local government be prudent and responsible. Some of the authorities controlled by the Liberal Democrats and certainly by the Conservatives have taken a less than responsible view of council tax setting this year.

Peter Pike: Does my right hon. Friend accept that although Burnley council would always want greater freedom and flexibility to tackle the problems that it faces, the No. 1 thing that it needs is more finance and resources to get on top of those many problems?

Nick Raynsford: I very much agree with my hon. Friend about the importance of resources, which is why I am sure that he will welcome the Government's decision to allocate an increase of 12.6 per cent. to Burnley council, which faces difficulties and is benefiting hugely from the Government's grant distribution system.

Mark Field: Will the Minister give an assurance that those councils that were deemed excellent in the recent review will be exempt from any proposed capping?

Nick Raynsford: We have already made it clear that we do not intend to cap authorities that have an excellent or good rating under the comprehensive performance assessment. However, it is incumbent on authorities that aspire to be good and excellent to be responsible in the organisation of their financial affairs. I am sure that the Audit Commission will want to keep a close watch on all authorities, including those that are good and excellent, to ensure that there are sound budgeting standards and that the temptation to manipulate the council tax for political purposes does not get the better of some authorities' judgment.

Eric Pickles: Has the right hon. Gentleman had an opportunity to look at the record of the high-performing councils, which in the past 10 years have had some of the lowest increases in council tax? This year, their increases are among the highest: the only thing that has changed is the grant formula. When that was announced in December, the right hon. Gentleman said that it was a generous settlement and there was no need for council tax to rise. He accused me of scaremongering for suggesting that band D council tax would be £1,000 for the first time, and that there would be double-digit inflation. Given that we were looking at the same figures, why was I right and he hopelessly wrong?

Nick Raynsford: The people who are hopelessly wrong are the hon. Gentleman's own local authority, which has just admitted that it made an error and managed to double count £3.7 million. He would do better to talk to Essex county council about getting its figures right instead of lecturing us.

Low-cost Housing

Michael Fabricant: If he will make a statement on his Department's policy on the provision of low-cost housing in (a) the south-east and (b) the midlands.

Barbara Roche: All regions, including the south-east and the midlands, will benefit from the increased funding for affordable housing announced in "Sustainable Communities: Building for the Future", which my right hon. Friend the Deputy Prime Minister presented to the House on 5 February.

Michael Fabricant: Does the Minister agree that it is important to minimise exhaust fumes and other forms of pollution? What percentage of low-cost housing will be built within half a mile of available work rather than on green fields?

Barbara Roche: As the hon. Gentleman knows full well, the purpose of the communities plan and sustainable housing is to incorporate the growth in jobs. We are looking at areas of high demand and are making sure that we have plans for the future. Let me tell the hon. Gentleman that I was delighted to announce the communities plan in the south-east with the Conservative leader of Ashford council.

George Stevenson: Will my hon. Friend comment on the enormous benefit of the Pathfinder project to areas in the midlands such as Stoke-on-Trent, where it provides more low-cost housing, regenerates housing stock and brings a sense of development to the housing market in north Staffordshire?

Barbara Roche: I am extremely pleased that my hon. Friend has raised that issue. It is essential that we try to regenerate those areas, and that aim goes hand in hand with our work in growth areas, which is why we are making an additional £500 million available. My hon. Friend's constituency will certainly benefit from that.

Parish Councillors

Stephen O'Brien: If he will make a statement on the number of parish councillors who have stood aside because of the parish council code of conduct.

Christopher Leslie: The Standards Board for England and the Office of the Deputy Prime Minister have been informed of 95 resignations by parish councillors unwilling to accept the code of conduct out of a total of more than 70,000 parish councillors across England.

Stephen O'Brien: The Minister's answer is proof, if proof were needed, of the Government's cynical contempt for the integrity and selflessness of hard-working parish councillors, often with years of non-political public service, who are the backbone of our rural communities in particular. Will the Minister now account for the Government's actions to my constituents, particularly Councillor Brian Smith of Tattenhall and district parish council, where 12 of the 15 parish councillors have resigned or are stepping down because of the monstrous code of conduct? Will the Government now revise the code, given that it is an attack on rural communities in particular and shows contempt for their approach to selfless public service?

Christopher Leslie: Only 0.1 per cent. of parish councillors cannot live with the basic concept of a register of members' interests. It is an important component of local democracy, just as it is of national democracy. Parish councils need to be seen to be objective and working in accordance with basic democratic principles. I do not believe that a register of members' interests is too much to ask.

David Taylor: I am a parish councillor. Does my hon. Friend agree that the standards of probity in parish councils are higher than in any other area of local government? Is it not a tad over the top that there are tighter restrictions on parish councillors, who may spend £7 per head of their population, than on Ministers, who may spend £7,000 per head? Will he admit that we could have it a little wrong?

Christopher Leslie: My hon. Friend's argument is wrong. We believe that parish councils are important and should be accorded significant respect and status. That is why we wish to extend the basic principle of a register of members' interests to parish councillors, just as one applies to all democratic layers of government in our country.

Local Government

Ken Purchase: What assessment he has made of the ways in which the comprehensive performance assessment will improve performance of local government.

Nick Raynsford: The comprehensive performance assessment outcomes for county and single-tier authorities were published on 12 December 2002. We are currently working closely with local government to ensure that councils build on their CPA assessments to achieve real improvements in the quality of the services they deliver.

Ken Purchase: Does my right hon. Friend understand that very few local authorities have confidence in the assessors? Does he know that one of the assessors for Wolverhampton council was a Lib Dem councillor from another authority? Can he see the irony of allowing a representative of a party constantly and consistently rejected by the voters of Wolverhampton to pass judgment on that council? Will he take steps to ensure that no such nonsense is repeated, in order that we may have greater confidence in the process?

Nick Raynsford: The vast majority of local authorities have welcomed the CPA, especially the peer review element, which has involved other councillors and council officers from other authorities contributing towards the assessment. We see that as an important part of the process. The crucial purpose of the assessment is to improve the quality of services. I am pleased that Wolverhampton council has been speaking positively about how it can improve its services in the light of the comprehensive performance assessment.

Social Exclusion Unit

Gareth Thomas: If he will set out the social exclusion unit's plans over the next 12 months.

Barbara Roche: My right hon. Friend the Deputy Prime Minister today announced two major new unit projects. The unit will work across Government to look at what more needs to be done to help people in the most deprived areas move into work, and to prevent social exclusion among adults with mental health problems.

Gareth Thomas: I warmly welcome that announcement. Will my hon. Friend ask the unit to undertake further work on the institutional, financial and legal barriers that still face social entrepreneurs who want to set up social enterprises to help in the regeneration of their communities? [Interruption.]

Mr. Speaker: Order. The House is far too noisy.

Barbara Roche: My hon. Friend raises an important point. We should certainly examine barriers to enterprise. The House will be interested to know that the rate of business start-ups is 10 times higher in the best parts of the UK than it is in the most deprived areas. Social entrepreneurs can make a magnificent contribution to neighbourhood renewal and regeneration.

Gary Streeter: Does the Minister agree that one of the greatest causes of social exclusion is the misery and poverty caused by drugs in our society? After six years of a Labour Government, why do heroin addicts in Plymouth still have to wait two years to get access to treatment?

Barbara Roche: I would be very pleased to discuss with the hon. Gentleman any problems that he is encountering in his constituency. As I am the Minister with responsibility for homelessness policy, which can sometimes, but not always, have a connection with drugs, particularly in respect of single homelessness, I have taken a keen interest in this area. I can tell him that very good progress is being made with the work of the drug action teams, but I shall certainly consider the issues in his constituency.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Henry Bellingham: If he will list his official engagements for Wednesday 5 March.

Tony Blair: Earlier this morning, we concluded the Northern Ireland negotiation, which I hope will allow a final and durable settlement. I met the Russian Foreign Minister at 8.30 this morning and had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

Henry Bellingham: Last Wednesday, the Prime Minister said that people should go to university on the basis of their merit. On Monday, his Minister for Lifelong Learning and Higher Education said that she would set specific targets for children from poorer backgrounds. Can he now clear up this confusion once and for all and assure pupils in my constituency that their university applications will be based on merit and transparency, and not crude social engineering?

Tony Blair: Of course, it should be based on merit and the ability of students, but I hope that the hon. Gentleman will also agree that we should do everything that we possibly can, subject to what I have just said, to widen access to our universities, because it is also important that we allow children from working class and poorer backgrounds the chance of a first class, quality university education.

Roger Casale: St. Helier hospital in south-west London has leapt from a zero to a two-star rating and has just taken delivery of ultra-sound equipment for cancer care. Does my right hon. Friend agree with Merton council and local campaigner Stephen Alambritis that such improvements make a good case for keeping the hospital open? Does not the case of St. Helier show that, through reform, we can improve the health service where those reforms are backed up by investment and not undermined by the 20 per cent. cut on expenditure proposed by the Conservative party?

Tony Blair: I entirely agree with my hon. Friend that it is important that we recognise that the extra investment going into our national health service is delivering real results for the people of this country, including, incidentally, 40,000 extra nurses since the last general election. There could be nothing more disastrous than a 20 per cent. cut across the board—the policy of the Conservative party.

Iain Duncan Smith: Will the Prime Minister confirm that, even if Saddam Hussein destroys all his al-Samoud 2 missiles, he will still be in material breach of resolution 1441 because of his failure to disclose his chemical and biological weapons?

Tony Blair: Yes, that is obviously right, since he has to disclose and destroy the entire chemical and biological weapons programme.

Iain Duncan Smith: The Prime Minister confirms that Saddam Hussein is in breach of UN resolution 1441, so will he now confirm that, unless Hans Blix reports to the Security Council on Friday that Saddam Hussein has co-operated fully, including the full disclosure of his chemical and biological weapons, there will be a vote on the second resolution early next week?

Tony Blair: The exact timing of any vote is a matter that is still under discussion, but yes of course it is the case that if Saddam Hussein fails fully to comply, there should be a vote in the United Nations. I hope very much that the United Nations supports the position that it set out in resolution 1441 last November, which called upon him to have full, unconditional and immediate compliance. It is plain at the present time that he is not in such compliance.

Iain Duncan Smith: The fact that Saddam Hussein remains in material breach means that military action is more likely. Will the Prime Minister therefore spell out exactly what is happening in the no-fly zone? Is it not now the case that British and American planes are making pre-emptive strikes on targets that would threaten our ground forces rather than just our aircraft? Surely that represents a substantial change in existing policy. Would not the Prime Minister help his own case if he more frankly spelled out to the British people what is exactly and really going on?

Tony Blair: No. The position on the no-fly zones remains exactly the same as that set out by the Defence Secretary earlier. Let me make a point in addition to those that I made a moment ago. Conflict could be avoided even now in one of two sets of circumstances. The first is that Saddam complies fully and unconditionally. Let us spell out what that means: accounting for the thousands of litres of anthrax, the hundreds of tonnes of precursor chemicals, the thousands of special munitions for chemical and biological warfare and the 1.5 tonnes of VX nerve agent, and giving proper access to Iraqi scientists and experts for interview. Thirty-four requests for such interviews have been refused. Of those granted, nine have been on Iraqi terms, not those that the inspectors set out. Saddam must therefore comply fully and absolutely.
	The second alternative is that he leaves. Those are the only two ways of avoiding conflict, but either route could prevent it. To those who claim that we are hell bent on conflict, I say that it can be avoided if Saddam does what the United Nations and the international community demand.

Gareth Thomas: While I recognise that my right hon. Friend's priorities are understandably elsewhere, may I encourage him to view enthusiastically the prospect of Government support for a British bid to host the 2012 Olympics? It would be based on, but not exclusive to, London. Apart from the obvious benefits to British sport, will he recognise the considerable benefits to British business, jobs and the acceleration of east London's regeneration?

Tony Blair: We entirely recognise the potential benefits of the Olympics bid. The Government will make their decision shortly. It is important to acknowledge, as my hon. Friend said, that people in London are fully behind the bid.

Charles Kennedy: When the Prime Minister says that he hopes that there will be a vote at the United Nations on a second resolution, is he implying that if no vote is held, Britain will still go in with the United States and military action against Iraq will follow?

Tony Blair: No. I simply say that it depends on Saddam's compliance. If he is not complying, a resolution will undoubtedly be put to a vote.

Charles Kennedy: Will the Prime Minister clarify his comments of last week? Can we have a guarantee that before any military action involving British troops is taken, there will be an opportunity for a debate and a definitive vote in the House?

Tony Blair: The Foreign Secretary spelled that out clearly in the debate. He said that, subject to the caveat that we have always expressed about the security of troops, the decision should be put to the House. I accept that, but with the greatest respect to the right hon. Gentleman, it is a matter not of process or procedure, although that is important, but of whether he, as well as us, is prepared to uphold resolution 1441, which everyone said that we should uphold.
	In the past few days, I have spoken to many world leaders and discussed the issue with them. Not a single leader or official of any Government disputes the fact that Saddam is not currently complying. Everyone accepts that he is not, that he is not co-operating properly and that he is a threat. Resolution 1441 stated that he had a final opportunity to disarm voluntarily and that he had to co-operate fully, unconditionally and immediately. Everybody accepts that he is not doing that. Surely the right hon. Gentleman should join me in urging people to vote for the second resolution.

Eric Joyce: The Prime Minister is aware that progress in Northern Ireland often appears to be a matter of two steps forward and one step back. After his discussions last night, what are his hopes for progress in the coming weeks?

Tony Blair: It was a detailed and good set of discussions over two days. It is possible that we have reached the basis for the final breakthrough to resolve all the outstanding issues of the Belfast or Good Friday agreement. It has to be done on the basis of a complete cessation of all paramilitary activity and implementation of all remaining parts of the agreement by the Governments and other parties. I think that there is real hope for that breakthrough, but the discussions over the next few weeks will tell us whether that hope is well founded. I hope that it is, because I truly believe that the one thing that people in Northern Ireland know—let me spell it out again—is that there is no way in which the agreement is going to be renegotiated: it is either implemented or we do not have the peaceful future in Northern Ireland that we all want to see.

Tom Brake: Does the Prime Minister recognise the figures of 12 per cent. and 50 per cent.? Twelve per cent. is the average council tax increase and 50 per cent. is the proportion of trusts that have either fiddled or misreported their waiting list figures. Which figure gives the Prime Minister the greater cause for concern?

Tony Blair: First, in relation to council tax, the hon. Gentleman will know that as a result of the funding that the Government have put into councils not a single council anywhere is getting anything less than an above-inflation increase. I believe that that is the first time that that has happened.
	Secondly, of course we deplore any inaccurate accounting that the Audit Commission found. However, I point out to the hon. Gentleman that the Audit Commission also found that in the case of the vast majority of trusts that were not the subject of its report the figures are plainly accurate and right. Furthermore, we have a situation whereby there is not a single waiting list national indicator, in-patient or out-patient, that is not better than it was in 1997.

Jim Sheridan: My right hon. Friend may be aware of BT management's proposals to outsource some 700 call centre jobs to India. May I ask him to use his good offices to discourage BT and any other like-minded employer from exploiting the low-wage economies of the world, particularly at the expense of British jobs? In the name of being British and of the morality of being British, that sharp practice has to be outlawed. Will he consider introducing legislation that would do so?

Tony Blair: I am afraid that I cannot say to my hon. Friend that it would be right to introduce legislation to outlaw it. Obviously we hope that as many jobs as possible are kept here in this country. I point out to my hon. Friend, however, that it is partly as a result of the way in which the economy has been managed and the labour market is run that we have a better position on unemployment and employment in this country than does virtually any other major country.

Richard Bacon: Can the Prime Minister say what principle makes it right to have a referendum on the single European currency, but wrong to have a referendum on the European constitution, which is of even more importance for the future of this country?

Tony Blair: I do not agree with the hon. Gentleman. The principle is the same as that which led, for example, to there not being a referendum on the Maastricht treaty. [Interruption.] I am sorry to bring back happy memories among Conservative Members, but that is correct. We have laid out very clearly the reason why we will have a referendum on the single currency. It is a big decision for the whole country and it is right that there should be a referendum. It is not the case that there was a referendum either on the Single European Act 1986 or on the Maastricht treaty.

Iain Luke: The Prime Minister may be aware of early-day motion 770, which was signed by many Scottish Labour Members, advocating the advantages to Scottish and to UK business of an early entry into the euro zone. Given Sir Edward George's comments yesterday about it being more advantageous than it was a year ago to consider entry to the euro, will the Prime Minister give an assurance that there will be no fudging of the Chancellor's five economic tests and make a pledge to call an early referendum to take Britain into the heart of Europe and of the European monetary system?

Tony Blair: Tempting though it is to speculate, I am afraid that I must simply repeat to my hon. Friend that the tests have to be completed by June and that those tests will of course be done on the basis of the assessment that we have already set out.

Iain Duncan Smith: Presumably the Prime Minister does not want to agree with the chairman of the Audit Commission, who said that some hospitals
	"have lost sight of the priorities"
	and
	"put the meeting of government targets before patient care."

Tony Blair: Of course hospitals should not do that, but the chairman of the Audit Commission also said that he thought that the maintenance of targets was an important part of making sure that the health service operated properly.

Iain Duncan Smith: The Prime Minister gave the same excuses 15 months ago when the National Audit Office produced the same report as the Audit Commission has today, and nothing has changed. His comments show that the culture of fiddling the figures goes right the way to the top. Today, the Audit Commission said that more than 90 per cent. of trusts gave inaccurate information on waiting lists. It said that some hospitals are
	"offering appointments to patients at short notice and then, when they are unable to attend . . . resetting the 'clock' measuring their waiting times to zero."
	Will the Prime Minister explain why, after he has been in charge of the health service for some six years, the Audit Commission chairman now says that it is under-managed and over-bureaucratised?

Tony Blair: First, it should be pointed out that we actually asked for this report from the Audit Commission because of the earlier report from the National Audit Office. Secondly, it was a report on 41 out of 300 trusts. Thirdly, it is extremely important that we do have targets for the health service. Of course the right hon. Gentleman is going to say that the whole of the health service is in chaos and crisis, and not offering proper treatment. That is because it is the desire of the Conservative party to run down the national health service, because it wants to cut its funding. The truth is that the record investment in the health service is delivering real results for people. It is delivering reductions in waiting times and in waiting lists; it is delivering more doctors and nurses, and more hospitals. Actually, the vast majority of people in the national health service get a decent level of health care from it. The right hon. Gentleman's alternative, which is to push people out into the private sector, may be fine for a few at the top, but it would be disastrous for the vast majority of users of our national health service.

Iain Duncan Smith: Instead of the Prime Minister trying to say what others might do, why does he not take responsibility for what he has failed to do? He should admit that he is raising taxes on hard-working people to fund a system that puts Government targets before patients' health, and which now has more bureaucrats than beds. Patients know that, whatever the Government say, they cannot believe a word that the Government produce. Is it not time that the Prime Minister apologised to the thousands of patients whose operations have been cancelled because of his political meddling?

Tony Blair: Let us indeed not take what I say, then, but consider, for example, what the secretary of the Society of Thoracic Surgeons said just a day or two ago about cardiac services. He said that people are now working
	"in an environment where waiting lists are plummeting; where the number of trainees in cardiac surgery has doubled; where new cardiac centres are being built and existing centres modernised and expanded; and where the results for heart surgery continue to improve and are better than in most of the developed world".
	That is what is actually happening in our health service today. Of course it is the case that, as I said, the right hon. Gentleman needs to run down the health service. He has got to say that the extra money going into the health service is not necessary, but he should talk to people in the health service. They know that it needs the extra funding that is going into it; that is what is producing the extra nurses, and the results on cardiac surgery. When we came to office, 60 per cent. of cancer patients were seen within two weeks, but that figure is now well over 95 per cent. That is where the money is going—on better national health service care.
	What the right hon. Gentleman has said yet again, in his opposition to what we are doing in April, is that the extra money that we would put into our national health service, he would take out. He would then add to that through 20 per cent. cuts across the board. [Interruption.] He and his hon. Friends can say what they like, but in the end that is the choice before the country, and I believe that this country will choose the national health service.

Andy King: I hope that, after Question Time, my right hon. Friend will accept two CDs made by constituents of mine. They want to pass on to him a message about the proposed large international airport in Rugby, and the message is clear: no airport here. Indeed, that is the message not just from Rugby, but from across the midlands. I hope that my right hon. Friend will enjoy listening to the CDs in his leisure time.

Tony Blair: I am sure that the CDs will make a fascinating listen. I hear exactly what my hon. Friend says. He will know that the consultation period is running for consultation on airports, and we have got to take account of all the representations made. He has made his point very strongly, and we will of course listen to it.

Adrian Flook: Will the Prime Minister confirm that he wants all hospitals to be foundation hospitals, or has he decided this week that he cannot fight a war on two fronts?

Tony Blair: As the Secretary of State for Health has made very clear, provided that hospitals meet the criteria, we want as many foundation hospitals as possible. It is right that we have freedom for those hospitals so that they can provide a good service for national health service patients. However, it is not just reform and freedom that they need—[Interruption.]

Mr. Speaker: Order. There should not be so much shouting.

Tony Blair: I must point out to the hon. Gentleman that it is not just freedom and reform that the NHS needs, it is money. The difference is that the Conservative party is not prepared to support the extra investment that is an essential part of getting reform to work.

Huw Edwards: Does my right hon. Friend agree that fear of detection is one of the most powerful tools in the fight against crime? Will he join me in congratulating Gwent police on having one of the highest detection rates of all the police forces in England and Wales, contributing to a 17 per cent. reduction in crime? Will my right hon. Friend consider the current funding formula to ensure that Gwent police are able to have a visible police presence—not only in deprived urban communities but in rural areas such as Usk?

Tony Blair: I am sure that Gwent will apply to—and, I hope, receive help through—the rural policing fund. My hon. Friend is right to point out that crime in his area is falling. There are also record numbers of police officers in this country today; we have more police officers than we have ever had before. That is essential in the fight against crime and it is one reason why so many police forces round the country are being successful in reducing crime.

Derek Conway: Is the Prime Minister aware that the pensioners of Old Bexley and Sidcup face not only a decrease in their incomes but a Labour council and Labour Government imposed council tax increase of 17 per cent.? What message does the Prime Minister have for the excellent headmistress of Marlborough school—a special school in Sidcup working with children with severe and profound mental and physical handicaps—who now faces a £65,000 shortfall in her budget and a real risk of losing excellent, experienced teachers because of the Government settlement? Will he consider such problems? This is not just about facts and figures; there are real problems for children who have the greatest need in our society.

Tony Blair: I will of course look into the situation that the hon. Gentleman has outlined. However, what he is saying, in effect, is that his school and his council need more money. It is for that very reason that we have put in such a large increase to the local authority budget; and it is for that reason that we are increasing the amount of investment in schools by a record amount. I say to the hon. Gentleman that, if the school has difficulties, it would, I think, react very adversely to a policy of having 20 per cent. cuts across the board.

Julie Morgan: Is my right hon. Friend aware that today sees the launch of the first annual report of the Children's Commissioner for Wales? The existence of the post has already made a great deal of difference to children in Wales. What plans does my right hon. Friend have to introduce a children's commissioner in England?

Tony Blair: We are studying carefully the Welsh example and the results of having a children's commissioner there. We have always set out why we believe that the situation is different in England. We have also had the Laming report in the intervening stages and we are considering our response carefully.

David Laws: I want to come back to the issue of foundation hospitals. Will the Prime Minister tell us whether he agrees with the Secretary of State for Health, who said in a speech last month that he was in favour of freeing such hospitals from the constraints of central Government and capital rationing—in other words, from the controls of the Chancellor of the Exchequer? We have the benefit of having both the Chancellor of the Exchequer and the Secretary of State for Health here today, so will the Prime Minister confirm which of them he is backing in this long-running Government dispute?

Tony Blair: As I said a moment or two ago, it is important that we get as many foundation hospitals as possible, based on the criteria that we have set out. However, just as I would say to the Conservatives that they are failing the country by failing to support extra investment, I would say to the hon. Gentleman that he and the Liberal Democrats are failing the country by failing to support the necessary reform. On this side of the House, our position is that we need investment and money in our health service.

David Stewart: My right hon. Friend will be well aware of the importance of research and development in Britain, particularly in developing industries such as aquaculture. Will the Prime Minister join me in expressing disappointment at the decision of the Sea Fish Industry Authority to close down the Ardtoe research facility in my constituency with the loss of 17 jobs? Will the Prime Minister agree to meet me and a delegation of research scientists to try to keep this vital facility open?

Tony Blair: I am aware of the position of the Sea Fish Industry Authority and I know that Ministers from the Department for Environment, Food and Rural Affairs and the Scottish Executive are prepared to meet my hon. Friend. If that meeting is unsatisfactory to him, I will be happy to meet him myself. We recognise the important role of aquaculture and the importance of research in the United Kingdom.

Gregory Barker: Now that the IMF has joined the swollen ranks of those who can see that the Chancellor is incapable of balancing the nation's books, what advice is the Prime Minister giving to his neighbour in Downing street? Should he put up taxes even further or cut public spending?

Tony Blair: I am glad that the hon. Gentleman raised the economic record of the Government. Let me tell him what the IMF report also said. It said that
	"UK economic performance has remained enviable".
	It also said that
	"the economy appears to have weathered the global slowdown relatively well" and that
	"the UK public finances are among the strongest in the G7".
	It is thanks to the Chancellor that we have the lowest inflation, lowest unemployment and lowest interest rates for years and years. We all remember the Tory days of 3 million unemployed, 10 per cent. interest rates and disaster for the British economy.

Lynne Jones: Would at least nine affirmative votes in the Security Council for the so-called second resolution tabled by the US, UK and Spain give clear—I emphasise the word "clear"—legal authority for war against Iraq? What difference would the use of what my right hon. Friend describes as the unreasonable veto make?

Tony Blair: First, let me assure my hon. Friend that we will always act in accordance with international law. Secondly, in relation to the resolution, we are confident of securing the votes for that resolution and we will carry on working to that end. We are doing that because we believe that it is important that the UN, having declared a position on Iraq, follows through and maintains that position. I know that my hon. Friend opposes our position on the matter, and I do not disrespect that—she is perfectly entitled to do so. However, I know that we both agree that the authority of the UN is important. If that authority is to be upheld, it is important that what we said last November is implemented. If it is not, the effect on the UN—apart from the effect on the international situation—would be disastrous.

Jenny Tonge: Is the Prime Minister aware of the deteriorating situation in the occupied territories? Is he also aware that since 1980 the United States of America has vetoed 14 resolutions of the Security Council on the middle east? Does he consider those vetoes reasonable or unreasonable?

Tony Blair: I simply point out to the hon. Lady that the UN resolutions are not just in respect of Israel, but of the Arab world and the Palestinians, too. In relation to the Palestinian territories, what is happening there is appalling, but the only way out of it that will maintain all the UN resolutions—not just those on Israel, but those on the Palestinians and the Arab world—is to get a peace process going again in the middle east. All I can say to her is that this country will play its full part in that, but in the end the only way to avoid the terrible tragedy that is happening to the Palestinians—and, indeed, to innocent Israeli civilians who are also dying—is to ensure that we get a proper peace process back on track. We will certainly do all that we can to facilitate that.

Tony Worthington: Three weeks ago in the United States the Under Secretary of Defense told the US Foreign Relations Committee how Iraq would be administered in a post-conflict situation. He said that an office of reconstruction and humanitarian assistance had been set up under General Garner. He invited contributions from UN organisations, aid agencies and coalition partners, and said that coalition officials would account to the US President through Donald Rumsfeld and General Franks. Is not it unacceptable that our aid agencies and UN organisations should respond to the US President? Is our policy that—

Mr. Speaker: Order. The hon. Gentleman should know how to ask a brief question. Will the Prime Minister try to answer?

Tony Blair: My hon. Friend makes an important point. All sorts of people may have made statements about the matter, but I shall tell my hon. Friend exactly what is happening. At present, we are in intensive discussions, with the US and others. Indeed, part of my discussions with the Russian Foreign Minister this morning was about how we make sure, if there is a conflict, that we take the greatest care of the subsequent humanitarian situation in Iraq. I have no doubt that there will have to be a substantial UN involvement. That is what we are arguing for and what we want to see. I believe that that will be the outcome. Therefore, rather than speculate about what might happen, I assure my hon. Friend that we will declare those plans to people as soon as we have them properly worked out.

Andrew Selous: The Prime Minister has just told the House that everyone accepts that Iraq is a threat, but many of my constituents tell me that they are still unclear about the direct threat and risks to the UK as a result of not disarming Iraq. What would the Prime Minister say to them?

Tony Blair: The hon. Gentleman is right to ask that question, as people do ask it. I think that the threat of leaving Saddam Hussein armed with weapons of mass destruction is twofold. First, it is that he begins another conflict in his region, into which Britain as a country would inevitably be sucked, with all that that means. Alternatively—and I think that this is a powerful and developing threat that the world must face—the risk is that states such as Iraq, which are proliferating these chemical and biological weapons of mass destruction, will combine in a way that is devastating for the world with terrorists who are desperate to get their hands on those weapons to wreak maximum destruction.
	The events of 11 September, of course, changed many American minds about the threat, but they should also change all our minds. Surely everyone accepts that, had the people involved been able to cause even more death and destruction, they would have done so? My worry is that, when there are nations that proliferate, trade and develop this stuff, and terrorist groups that are desperate to cause maximum destruction, the world has to stand firm. The matter has come to a point over Iraq. If we do not stand firm over Iraq now, we will never be able to deal with the next threat that encompasses us.

Points of Order

Michael Howard: On a point of order, Mr. Speaker. The House will be aware that the Chancellor of the Exchequer today announced that he intends to deliver his Budget statement on 9 April. You will be aware, Mr. Speaker, that that is the day before the date on which the House is due to rise for the Easter recess. I hope that all hon. Members will agree that it would be entirely unacceptable for debate on the Budget to be curtailed or postponed until after the recess. May I therefore ask whether you have had any indication that the Easter recess will be postponed, so that the customary four days of debate will take place immediately after the Budget? The House must be able to discuss the Budget's implications for the black hole in the Government's finances, the imminent and substantial rise in taxation, and the burgeoning pensions crisis—all of which lie directly at the Chancellor's door.

Mr. Speaker: Order. I am as concerned as everyone else about the Easter recess. However, the Leader of the House will answer business questions tomorrow—[Interruption.] Order. It would be more appropriate for hon. Members to put that matter to the Leader of the House tomorrow. [Interruption.] Order. What I am trying to say is that it is not a matter for me.

Alex Salmond: Further to that point of order, Mr. Speaker. I wish to raise a matter which, if I may say so, is even more important than the Easter recess. That is that 9 April is right in the middle of the election campaigns in Scotland and Wales. Either the Chancellor has forgotten about that—which seems unlikely, as he is frightened of losing the elections—or he is showing breathtaking arrogance. My point of order for you, Mr. Speaker, is that a previous Government ended up losing in the Scottish courts when they tried to abuse the local electoral process in Scotland, never mind the parliamentary one. Is not the Chancellor in danger of ending up in exactly the same position?

Mr. Speaker: In a sense, the hon. Gentleman answered his own questions. That matter is not for me—it is for the Scottish courts.

Eric Forth: Further to that point of order, Mr. Speaker. If the Leader of the House knows the proposed dates for tomorrow, surely he must know them today. Why cannot the right hon. Gentleman—who is in his usual place—share with you and the rest of the House the Government's proposals, so that right hon. and hon. Members may know as soon as possible, then perhaps follow up the matter in business questions tomorrow? Following the intervention of the hon. Member for Banff and Buchan (Mr. Salmond), there are severe implications for the rules governing the politicisation of the run-up to elections and they should be fully considered. When will we get proper guidance? Why do we have to wait?

Mr. Speaker: I think that the Leader of the House wants to come in on a point of order.

Robin Cook: Further to that point of order, Mr. Speaker. Having said that it would be more appropriate to make the announcement at business questions, you will forgive me, I hope, if—in response to the right hon. Member for Bromley and Chislehurst (Mr. Forth)—I share with the House the information that I intended to announce tomorrow. That may be for the convenience of right hon. and hon. Members, so that there is no mystery about it.
	It is standard procedure that there should be four days of debate following the Budget statement. It would be our intention to make sure that the House will have the opportunity to debate the Budget over four full days. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) is correct that it would be wrong to delay. That was never our intention. We shall therefore be tabling a motion for the House to sit on the Friday of that week for a day's debate on the Budget. The Budget debate will continue until the Monday of the subsequent week—14 April—when it will conclude. There will be, as always, four days' debate on the Budget.

Angela Browning: Further to that point of order, Mr. Speaker. It will be the first time that there has been such a partitioning of the Budget debate, with its deferral until April. That seems to coincide with the changes made to the sittings of the House. Will you please investigate the relationship between those changes and the appalling decision to defer the Budget debate?

Mr. Speaker: This is in danger—[Interruption.] Order. This is in danger of turning into a debate. The hon. Lady asked me to look into the matter. Perhaps I will look into the matter. That would be the best way.

Lembit �pik: On a point of order, Mr. Speaker.

Mr. Speaker: I hope that it is not on the same subject. Is it different?

Lembit �pik: My point of order refers to the talks on Northern Ireland over the past two days. Given that some Northern Ireland parties have not seen the full content of that which was agreedcertainly the Opposition parties in this House have not done sois there any mechanism that would cause the Prime Minister or the Secretary of State for Northern Ireland to come to the House to make a statement on what has been agreed for our consideration?

Mr. Speaker: Perhaps that is something that the hon. Gentleman could raise in business questions tomorrow.

POLICE (NORTHERN IRELAND) BILL [LORDS] (PROGRAMME) (NO. 3)

Motion made, and Question put forthwith, pursuant to Orders [28 June and 29 October 2002],
	That the programme order of 10th February in relation to the Police (Northern Ireland) Bill [Lords] shall be further amended by the substitution in paragraph 2 (conclusion of proceedings in standing committee) for Thursday 6th March of Tuesday 11th March.[Mr. Woolas.]
	Question agreed to.

Orders of the Day

Local Government Bill
	  
	[1st Allotted Day]

As amended in the Committee, considered.

New Clause 10
	  
	Local Retention of Rates

'(1) In Schedule 8 to the 1988 Act (non-domestic rating: pooling), in paragraph 4 (rules for calculating authorities' non-domestic rating contributions), before subparagraph (5) there is inserted
	(4A) The rules may include provision for such deductions as the maker of the rules thinks fit for the purpose of enabling an authority to retain part, or all, of so much of the total payable to it in respect of the year under sections 43 and 45 above as exceeds an amount determined for the authority by or under the rules.
	(4B) Subparagraph (4A) above shall not apply in the case of a special authority.
	(4C) Subparagraph (2) above shall have effect subject to subparagraph (4A) above.
	(4D) The consent of the Treasury is required to the inclusion in regulations under this paragraph of provision under subparagraph (4A) above relating to England.
	(2) In paragraph 5(6) of that Schedule (contribution to be calculated after end of year and certified by Audit Commission)
	(a) before the word and at the end of paragraph (b) there is inserted
	(ba) if it is an authority in England notify to the Secretary of State, and if it is an authority in Wales notify to the National Assembly for Wales, the amount of any deduction that in accordance with provision under paragraph 4(4A) above is made in calculating the amount mentioned in paragraph (a) above, and
	(b) in paragraph (c), for and the amount there is substituted , and the amount or amounts notifiable under paragraphs (b) and (ba) above,.
	(3) In paragraph 5(6A) of that Schedule (Audit Commission to send copy of certification to Secretary of State or National Assembly for Wales), after the amount there is inserted or amounts.
	(4) In section 99 of the 1988 Act (regulations about English billing authorities' collection and general funds), after subsection (3) there is inserted
	(3A) The Secretary of State may by regulations make provision
	(a) for the sharing among a billing authority and major precepting authorities, in accordance with prescribed rules, of an amount equal to all or part of any deduction that, in accordance with provision under paragraph 4(4A) of Schedule 8 below, falls to be made in calculating the billing authority's non-domestic rating contribution for a financial year;
	(b) for requiring a billing authority to inform, within a prescribed period, any major precepting authorities of any amount that falls to be shared under provision under paragraph (a) above and of the effect of the rules governing its sharing;
	(c) as to the manner in which any payments which fall to be made by a billing authority by virtue of any provision under paragraph (a) above must be made;
	(d) as to the period within which, or time or times at which, any such payments or instalments of such payments must be made; and
	(e) as to the recovery (by deduction or otherwise) of any excess amount paid by a billing authority in purported discharge of any liability arising by virtue of any provision under paragraph (a) above.
	(3B) The rules that may be prescribed under paragraph (a) of subsection (3) above include (in particular) rules that require a billing authority, when making an estimate under that paragraph, to disregard amounts that fall to be shared under provision under subsection (3A)(a) above.
	(5) In section 97 of the 1988 Act (English billing authorities: principal transfers between funds), after subsection (4) there is inserted
	(4A) Where in accordance with regulations under section 99(3A) below a billing authority is required to share any amount, it shall transfer from its collection fund to its general fund so much of that amount as, in accordance with the regulations, it calculates to be its share.
	(6) In section 99(1)(b) of the 1988 Act (regulations about liabilities of English billing authority under section 97(1) or (3) to transfer sums from its collection fund), for or (3) there is substituted , (3) or (4A).
	(7) In section 38 of the Local Government (Wales) Act 1994 (c. 19) (council funds for principal councils in Wales), after subsection (9) there is inserted
	(9A) The National Assembly for Wales may by regulations make provision for the sharing among a new principal council and major precepting authorities, in accordance with rules specified in the regulations, of an amount equal to all or part of any deduction that, in accordance with provision under paragraph 4(4A) of Schedule 8 to the Local Government Finance Act 1988 (local retention of rates), falls to be made in calculating the council's non-domestic rating contribution for a financial year.
	(8) In subsection (10) of that section (provision that may be included in regulations under subsection (9))
	(a) for The regulations there is substituted Regulations under subsection (9) or (9A), and
	(b) in each of paragraphs (d) and (e), after the liability mentioned in subsection (9) there is inserted or any liability arising under subsection (9A).
	(9) In that section, after subsection (11) there is inserted
	(12) In subsection (9A) major precepting authority has the meaning given by section 39(1) of the Local Government Finance Act 1992..'.[Mr. Raynsford.]
	Brought up, and read the First time.

Nick Raynsford: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to discuss Government amendments Nos. 19 to 23.

Nick Raynsford: New clause 10 will provide for local authorities to retain some or all of the growth in business rate revenue for their areas. The proposals will allow us to introduce a scheme along the lines that the Chancellor announced in his 2002 pre-Budget report. The scheme will increase the incentives for business and local authorities to work in partnership, to maximise local economic growth and regeneration, while at the same time governing additional resources to address local priorities.
	Any scheme introduced will generate additional revenues from increases in the tax base generated by local authorities successfully encouraging growth and not from increasing the tax on existing business. The money raised would be genuinely additional to local authorities and they will be free to decide how to spend it. The scheme will allow local authorities to keep only revenues associated with any growth in the business rate tax base and will not replace the current business rate pooling system. The business rate pool acts to reduce the unfairness of business rates and to ensure that revenues are distributed more equitably.
	New clause 10 provides for a scheme in England, with rules set by the Secretary of State, and for Wales, with rules set by the National Assembly for Wales. The provision also allows the Secretary of State to implement arrangements for sharing the retained rates revenue between different tiers of authority. That will allow us to balance the need to furnish incentives to encourage business development with providing additional resources to the tier of authority that faces increased cost following business development. It is not the Government's intention that the new scheme should serve to reward only authorities that are already doing well, at the expense of declining areas. We are looking at a range of options to get the best distributional fit, with each local authority receiving an incentive that is relevant to them, while keeping the scheme as simple as practical.
	We have also made it clear that local authorities will not bear the downside risk of a declining business rate tax base. We are considering options that will allow local authorities to benefit from the scheme, even though they are in economic decline, should they manage to slow the pace of that decline.

Edward Davey: On that point, will the right hon. Gentleman explain how on earth the Government will be able to measure relative economic decline and whether the actions of a local authority have managed to slow it?

Nick Raynsford: The hon. Gentleman anticipates what I am about to say. We shall be consulting on the options, including the distributional consequences, in the summer. These are important issues and it is right that they should be considered by a range of people. We certainly expect there to be full and thorough consultation before detailed arrangements are put in place. There are technical points and issues of fairness that need to be addressed, as the hon. Gentleman rightly highlighted.
	The provision is sensible and will allow for a new introductiona new arrangement that will incentivise local authorities and help to build a better relationship between local authorities and business.
	Amendments Nos. 19 to 23 are all consequential. I commend the provisions to the House.

Philip Hammond: If my interpretation is correct, new clause 10, as the Minister for Local Government and the Regions has presented it, is an attempt to give local communities a stake in economic development in their areas. However, we should make it clear that, although the phrases economic regeneration and economic development were used in the ministerial statement published last week and in the Treasury document, we are actually talking about new buildingsnew physical development and infrastructure.
	The provision takes a new and interesting approach to fighting nimbyism by recognising the contribution to that syndrome of a lack of immediate fiscal benefit to the community from new developments. The Government are taking an interesting initiative, which is broadly welcome.
	However, the new clause is only a small beginning. Will the Minister explain whether the Government intend to extend the principle? If I correctly interpreted the real underlying purpose of the provision, which the Minister may not have heard because he was busy conferring with his colleagues, and it gives communities that suffer the burden of new development some fiscal stake in the benefits from that development, are the Government considering extending that principle to council tax receipts? Could new housing development add to the fiscal benefits enjoyed by a community? That might make it easier for the Government to secure the support, or at least the acquiescence, of local communities in their attempt to impose the housing objectives that the Deputy Prime Minister has outlined over the past few weeks.
	Regulations will determine the detail of the measure, and I was expecting the Minister to be rather more forthcoming in his opening remarks. I was expecting to be scratching through my notes with a blue pen because the Minister had answered the questions that I had intended to put to him. The House is being asked to add the new clause while knowing almost nothing at all about the detail of the proposals.

Edward Davey: I might be anticipating the hon. Gentleman's speech, but does he agree that it is probably not appropriate to make this tax change using secondary legislation?

Philip Hammond: The hon. Gentleman will remember that the Minister gave a pledge on Second Reading that the Government intended to make draft regulations available to the Committee before the regulation-making powers in the Bill were considered. The Minister has made no apology to the House for the fact that there are no draft regulations in this case, although we are of course considering the new clause for the first time. Indeed, I place on record the fact that, by and large, the Minister lived up to the commitment he made on Second Reading, and the Committee received a continuous supply of draft regulations, which greatly informed and enlightened the debates on those regulation-making powers.

John Bercow: My hon. Friend will know that I was not one of that privileged, small group of hon. Members who were considered suitable to serve on the Committee, and I am anorakishly but legitimately concerned about the opportunity for all right hon. and hon. Members to debate such matters on the Floor of the House. Does he agree in that context that we need to know whether the regulations will be subject to the affirmative procedure or to its negative counterpart?

Philip Hammond: My hon. Friendwho would, indeed, have been a fine addition to the strength of Standing Committee Atakes a great interest in the distinction between the negative and affirmative procedures, and it would be extremely useful if the Minister could clarify that point in responding to this short debate.
	We are dealing with a slight gap in the armament of scrutiny, as we have had the benefit of the regulations only in relation to other parts of the Bill. The Minister talks about a consultation exercise in the summer, but it is simply not good enough that the House is being asked to agree to the new clause without any draft regulations or explanatory notes and, therefore, any indication of the Government's intentions. Are we talking about 5, 50 or 95 per cent.? Once again, we are being asked to vote for a pig in poke in agreeing to the new clause. Will the Government make anything available before the Bill is considered in the other place?
	I should like to pick up two points from the very limited information that we have at the moment, which consists of the Treasury's pre-Budget statement, last week's ministerial statement, which repeated a chunk of it, and the Minister's contribution today, which repeated a chunk of that. It is clear that local authorities will retain a portion of new non-domestic business rates, but the statement refers to growth in the business tax base. It is not clear to me whether the Minister is contemplating that only a portion of that growth in the tax base attributable to new buildings will be included in any percentage to be retained, or whether he expects that revaluation increasesperhaps representing a general uplift in an area's economic tonewill be included in the amount from which a proportion will be retained.
	I should like to understand a little more about the phrase additional increases, which was used in the Treasury statement and, I think, repeated in the Minister's statement. I understand the term additional non-domestic rates; I understand the term increases in non-domestic rates, but I do not understand the term additional increases in non-domestic rates. I suspect that the Minister has in mind that there will be an amount of increase that the local authority must first achieve without receiving any retained percentage, and that only the addition above that increase will attract the retained percentage. Those are the kinds of things that we need to understand if we are to make an informed judgment about what the Minister proposes. Without draft regulations or any statement of Government intention, it is simply not possible for us to form a clear opinion.
	Nevertheless, on the face of it, any empowerment of local authorities to keep even a portion of the non-domestic rate is welcome, and, I might say, in stark contrast to the Government's approach on capital receipts, which reduces the flexibility of local authorities. On a closer reading of the ministerial statement, however, I have one or two concerns about how straightforward the process will be.

Edward Davey: Before the hon. Gentleman moves to a detailed analysis of this proposal, will he clarify that, in principle, the Conservatives are in favour of part of the increase in the business rate being kept locally? Can he explain how that is consistent with previous Conservative policies? It may be, but, for the benefit of the House, will he elaborate the exact Tory position?

Philip Hammond: The hon. Gentleman and I have had these enjoyable exchanges on many occasions during proceedings on this and other Bills. It is our position that increasing local autonomy is right, and that genuinely community-based local government is the right approach. To the extent that it can be prudently done within the overall fiscal framework, the maximum possible autonomy should be accorded to local authorities.
	The phrase in the Minister's short written statement of 25 February that has given me concern is the following:
	We are looking at a range of options to get the best distributional fit, with each local authority receiving an incentive that is relevant to them, whilst keeping the scheme as simple as practical.[Official Report, 25 February 2003; Vol. 400, c. 9WS.]
	Anyone who has looked at a Government scheme relating to local government finance will know that as simple as practical must have a different meaning from the one that it would have to the layman. Could what at first looks like a welcome devolution of power back to local authorities, to allow them to keep a tiny fraction of their non-domestic rate income, be a complex system of specifically tailored incentives to local authorities to deliver on a specific Government agendain this case, facilitating the development of business property and infrastructure in the area? If that is how it works in practice, with different targets, thresholds and criteria for different councils, it will effectively be another piece of ring-fencing whereby local authorities get an additional slice of money only if they comply with a specific Government agenda and deliver on specific Government targets. The Minister shakes his head to imply that that is wholly wrong, but we simply do not know, because he has told us virtually nothing about this measure. We need to know how it will work, and how we can know that it will be fair and not just another mechanism for redistribution to the Government's favoured authorities.

John Bercow: It certainly appears that the fog of confusion descending on this subject is becoming deeper by the moment. If moneys are to be shuffled back and forth in an uncertain way and in accordance with a labyrinthine formula, what assessment has my hon. Friend made of the principles on which calculations of entitlement to interest will be made?

Philip Hammond: I can tell my hon. Friend with absolute honesty that I have made no assessment at all of that matter.

John Bercow: Has the Minister?

Philip Hammond: I suspect that the Minister, with the substantial resources available to him, is also not in a position to make any such assessment, precisely because we lack many of the relevant details about how the scheme will work.
	Let me pick up on something that the Minister said in his brief contribution at the outset of this debate. To paraphrase, he said that this was genuinely new additional money and was not intended to interfere with the existing pooling system for national non-domestic rates. I do not profess to be an expert on local government finance. Indeed, one of the Minister's predecessors many years ago once remarked to me that only one person in his Department genuinely understood local government finance, and he was about to retire.

John Bercow: It is like the Schleswig-Holstein question.

Philip Hammond: As my hon. Friend says, it is like the Schleswig-Holstein question, often posed and never resolved.
	The Minister says that this additional money will not interfere with the pooling system. I presume, however, that there is only one pot, and money that does not go into that pot because it is effectively top-sliced to the retaining local authority will not be there for distribution to other local authorities. That could have several consequences. The amount of NNDR received by all other local authorities that do not achieve the Government's threshold may be reduced, and Government grant, under the formula grant process, may be increased to make up the gap. If that is the case, perhaps the Minister could say so clearly. If that is not the case, taking anything out of the NNDR pot must reduce the amount for redistribution to other authorities.
	The only other alternative is that there are no other authorities, and the so-called incentive scheme is so structuredor tailored, as the Minister calls itthat every authority gets to retain a slice of its NNDR, in which case the effect may be minimised, although that will make it difficult to see the benefits of the scheme. Can the Minister give a pledge, here and now, that grant will make up the shortfall in the NNDR pot available for redistribution as a result of top-slicing for retention by local authorities? The grant that is retained will therefore be genuinely additional to the total amount of moneycouncil tax receipts, plus formula grant, plus NNDR redistributedthat that authority would have received had it not been for the top-slicing that the scheme involves. If the Minister can give that assurance, he clearly has the details of the scheme in his mind, if not on a piece of paper. Why has he not been able to share those details with the House?
	I turn to a specific question, which I apologise for asking, as it is the kind of question that one would ask properly in Committee. When the Government introduce new clauses on Report, however, we must ask such questions on the Floor of the House. Proposed new subsection (3B) of subsection (4) of the new clause, which inserts new words into section 99 of the 1988 Act, refers to
	rules that may be prescribed under paragraph (a) of subsection (3).
	I take that to mean subsection (3) of section 99. I have obtained the intranet print of the Local Government Finance Act 1988, and, although I find subsection (3) in it, I find no paragraph (a). Is that a typographical error? Does it mean to refer to the proposed new subsection (3A) to be inserted by the new clause? Perhaps the Minister will clarify that specific point when help comes to hand.
	The principle of local retention is welcome, but it must be a genuine additional resource and not just a redistribution from one authority to another. The Government have said that no authority will suffer from negative business rate growth, but they have not said that none will suffer from the reduced size of the total NNDR pot for redistribution. Will the Minister give that assurance today?
	The Treasury document and the ministerial statement have sounded alarm bells, and we need to see the regulations before we know whether their sounding is justified. I hope that the Minister will be able to explain why he cannot provide even an indicative outline of the Government's intentions in the way that he has done for some other clauses. Will he make a commitment today that such an outline will be available when the Bill reaches the other place?
	We will not oppose the new clause, but I hope that a substantive debate on the issues will be possible in the other place or, if for any reason that is not possible, when the regulations are laid. I still hope that we will be able to persuade the Government that the provision should involve a small first step to devolution of financial autonomy back to local authorities. The rest of the Bill certainly does not deliver that.

Edward Davey: The new clause puts me in a bit of a quandary. I want local authorities to have extra autonomy for their spending and local taxation, so allowing local authorities to retain part of the growth in the business rate is clearly a welcome step. However, the sheer complexity of the scheme that is likely to emerge from the consultation is mind-boggling, and not just in terms of working out how the increase will be measured but, as the Minister has acknowledged, in terms of working out how we will assess the relative economic decline of an area that does not have a growing business rate tax base. We will also have to assess whether there had been a reduction in the pace of that decline because of local authority action. All that shows just how complex the proposal is.
	We should give credit to the hon. Member for Runnymede and Weybridge (Mr. Hammond). He talked about how the policy would sit alongside the pooling of the uniform business rate. If the Minister answers the hon. Gentleman's question in the affirmative and if it appears that grant will be paid back into the pool to compensate for any loss of rate proceeds, the grant side of the scheme will also be complex. One can imagine the regulations that will have to be introduced. We now realise why they were not ready for consideration by the House today.
	We should be worried about complexity in taxation matters. The Government have made the whole tax system far more complicated, and that has put huge extra compliance burdens on businesses and individuals. The provision will place an extra compliance burden on local authorities, and we must try to work out whether the extra financial autonomy that will be gained as a result of this timid devolution of financial power is worth the extra complexity. The House and local authorities will have to consider that balance. Our conclusions will depend on their assessment of whether the proposal is a sensible way forward.
	Because of the complexity, I wonder where on earth the scheme came from. As the hon. Member for Runnymede and Weybridge pointed out, it appeared in the Chancellor's pre-Budget report, so does that mean that it came out of No. 11 Downing street and the Treasury? It is a fiendishly complicated and clever scheme of the type that the Chancellor is very good at dreaming up. Did a certain Ed Balls help the Chancellor to dream up the scheme in the back of a cab or in a pub? It has that sort of feel. It does not appear that the policy has gone through rigorous analysis in the civil service. It is rather bizarre.
	I am glad that the Government are committed to consulting widely with the Local Government Association and many other stakeholders. The consultation will have to be pretty extensive and involve the consideration of detailed proposals. I hope that we will have an early sight of any draft regulations before we scrutinise them in the House.
	As I said in an intervention on the hon. Member for Runnymede and Weybridge, I am concerned that, because we know so little about the proposal's eventual form, the House will be asked to provide primary legislative agreement and will be able to consider the detail only in a Statutory Instrument Committee. The proposal will probably involve hundreds of millions of pounds, and the figure is likely to grow over the years. Therefore, one would normally expect to debate such a matter in a proper Standing Committee. Since I became a Member of the House, I have had the fortune or misfortune to serve on more than seven Finance Bill Committees. They consider tiny and minor tax changes, and we spend hours in a full Standing Committee debating the merits of tax change that is worth just a few million pounds. Although the Minister pumps this up as a major tax change, he says that it will be suitable for consideration in a Statutory Instrument Committee. I have problems with that, so I hope that he will try to convince me that this is the right route for the House to take.
	I also want to probe the logic behind the Government's proposal. It seems that the Conservatives have now changed their position, so we can now all agree that it is right that local authorities have, to an extent, more control over business rates in their areas. Would it, therefore, not be logical to go further than the Government propose? Ever since the Government nationalised the business rate, Liberal Democrats have argued that there is a case for denationalisation and for handing back the control of rates to local authorities. We would do that fully and completely and not in the partial and minor way envisaged by this proposal.
	Will the Minister reflect on our suggestion? He may try to keep his counsel, but he will know that the Government have set up the balance of funding review. That review is relevant to the debate, because it will examine how much of a local council's budget should be raised through local taxes and how much should come from central Government grant. The presumption is that the review will try to shift the balance so that more of a local authority's revenue comes from local taxes. Clearly, this proposal would be a small step in that direction.

Philip Hammond: And the 55 per cent. council tax rises.

Edward Davey: The hon. Gentleman refers to the huge rises in council tax, and he is right. Unfortunately, they may be part of the shift, though not a very welcome one. It is such an unfair tax.
	However, before I am called to order, Mr. Speaker, I shall move on to the point that I was about to make. The Government have set up the review and, if they wish to change the balance, surely the business rate is one of the ways they could do that. Businesses are often in two minds about such a suggestion. In the past, they were worried that some local authorities would behave unwisely, levy too high a business rate and undermine economic activity. I presume that is why the Tories nationalised the business rate. I suspect that the proposal is framed in such a complex manner in an attempt to avoid that problem.
	Other business peopleand sometimes the same business person in the same conversationwill argue that, since the business rate was nationalised, their links with the local authority have been weakened. The dialogue between businesses and local authorities has been significantly reduced. That is certainly the experience in Kingston, the borough containing my constituency. Although local authorities have tried to overcome the problem of reduced dialogue, the fact that we no longer have a locally raised business tax has got in the way of an important partnership.
	The Government talk about building up that partnership. Given the logic of that and of this provision, will the Minister tell us whether the Government have contemplated going even further to the full denationalisation of the business rate? It could be a local business rate that is based on properties or, as the Liberal Democrats propose, it could be based on land values. I commend our proposal because by widening the tax base to include undeveloped land, we would reduce the business rate burden on existing businesses.
	I hope that the Minister will explain why he is taking a partial route. We are minded to support the new clause because it will give a little extra financial autonomy to local authorities, but we want to see the details before we sign up to it in the other place and agree to the regulations that will follow.

Nick Raynsford: We have had a useful debate on an important issue. I appreciate the generally positive response of the hon. Members for Runnymede and Weybridge (Mr. Hammond) and for Kingston and Surbiton (Mr. Davey). I agree with the hon. Member for Runnymede and Weybridge that it is right to explore ways in which we can give greater freedom and flexibility to local government. In fact, that is one of the great themes running through the Bill. Therefore I was a bit disappointed at his churlish remarks about other freedoms, such as borrowing, trading and levying charges on discretionary charges, all of which are included in the Bill. The hon. Gentleman's Government took more from local government than any other in recorded history. He should surely recognise and acknowledge this Government's steps to give greater discretion to local authorities. However, I welcome a sinner who even partially repents and I am delighted that he feels able to support, at least in principle, our proposal to allow some measure of local discretion over additions in value, created through either development or local authority actions, to enhance the non-domestic rate base.

Philip Hammond: The Minister emphasises the word additions. I hope that he will say what is meant by additional increases. He also refers, however, to actions that are due to the local authority. Will some Government official determine which bits of economic growth are due to the work of the local authority and which are due to the work of the market?

Nick Raynsford: I will deal with those matters. Let me start with the philosophic principle behind the policy. We do not believe that those areas where there is an increase in the non-domestic rate base should automatically get the full benefit; nor do we think that those areas that have a much harder task to retain industry and investment and to attract new investors should not get the benefit, because they face far greater difficulties. It is right to have a regime that genuinely rewards additional increases to non-domestic ratepayers but does not penalise those authorities that succeed in stemming decline when an authority would otherwise face economic problems. The issue is difficult and we have not yet finalised our proposals.
	We have not published regulations because the scheme is in its early stages. I am grateful to the hon. Member for Runnymede and Weybridge for his kind remarks about our willingness to try to make regulations available on all other matters covered by the Bill, but the scheme's proposals have just been made, following the Chancellor's announcement, and we intend to hold a full and thorough consultation, beginning in the summer, on how it will operate. The scheme will inevitably be complex. Difficult issues need to be addressed and we want to ensure that there is a full debate.

Edward Davey: I agree that areas that are experiencing a relative economic decline with a falling business rate tax base should not be penalised and that the system should be asymmetric, but I cannot get my head around trying to measure different speeds of decline and what actions have been taken by whomthe market or the local authorityto change those speeds of decline. I understand why the Government want to help those areas, but is that the right mechanism?

Nick Raynsford: It is the right way to help those areas. Authorities should have an incentive. The hon. Gentleman mentioned the importance of creating closer links between business and local authorities. We are keen to do that in many ways. He knows that the business improvement district arrangements are a specific attempt to create closer links between business and local authorities. We believe that the incentive scheme will do exactly that. It would be perverse, however, as I think he acknowledged, if those authorities that have a much harder task to attract new investment and to expand their non-domestic rate base were prevented from benefiting from the scheme, especially if any huge effort that they put into encouraging good relations with business and attracting new investment is offset by a general trend of decline in the area's economic prospects.
	We want a scheme that allows such efforts to be rewarded. I accept that that will be difficult. A baseline will need to be established which is founded on principles that will be the subject of full consultation. It will need to reflect the starting point against which any increases or reductions can be measured. The mechanisms will need to be agreed and the measurements will also be the subject of fairly detailed discussion.

Philip Hammond: Can the Minister clarify whether he means a growth in the tax base, by which I mean the base of property, some of which may be empty, that has rateable value, or growth in the rates received? In other words, does an empty factory that is filling up and starting to pay rates count as growth?

Nick Raynsford: The hon. Gentleman raises an interesting question. We relate growth to the rate base. We do not want short-term variations, as a result of premises being empty for a short time, to distort the arrangements. There will clearly need to be rules to govern what should happen if there is a significant increase in the tax base but no overall increase in the rates derived.
	Before I go into the detail, let me explain how we will ensure that information about the proposals is made available in the most comprehensive way to help discussion. We will provide notes for consideration in the other place, setting out our broad policy intent. They will outline a number of options on the scheme's detail. They will not take the form of a draft set of regulations because it would be premature to draft regulations before the consultation is complete, especially as the consultation is designed to tease out some of the complexities that may have to be addressed and to enable us to reach the right formulation. We intend to provide Members of the other place with more detailed information about our policy. I hope that the hon. Gentleman will recognise that that is in keeping with the spirit that we have adopted throughout the Bill's consideration.
	The hon. Member for Runnymede and Weybridge asked whether we would extend the principle to the council tax. The answer is no, because the council tax is raised in such a way that the local authority receives the revenue raised. It would be bizarre to have an incentive when there is no question of them not receiving whatever council tax is due to them. The scheme is a response to his Government's action to ensure that non-domestic rates are not locally available other than in exceptional circumstances. As I said, we want to provide an incentive to local authorities to attract additional investment. The scheme will give them an additional bonus and it would be inappropriate to apply it to council tax.
	The hon. Gentleman also asked whether regulations would be made by affirmative or negative resolution. We intend to make them by negative resolution but, to pick up on what the hon. Member for Kingston and Surbiton said about statutory instruments, that will only take place after a full discussion that is based on the consultation. That will allow the issues to be examined in great detail not just by Members of Parliament, but by a wider public. We all recognise that it is important to have full consultation on the scheme.

Philip Hammond: I am disappointed that the Minister said that the regulations will be made by negative resolution. Can he assure us that if they are laid before the House and are prayed against by the Opposition he will use his influence with the business managers to ensure that a proper debate on such a negative resolution is held?

Nick Raynsford: I know that the Opposition tend to pray against almost any regulations, but it would be right and proper to have a full debate on those particular regulations. I would use any influence that I may have to assist with that aim, as there is every reason to debate those important matters. I hope that the hon. Gentleman will approach the matter in the spirit of constructive engagement that has characterised previous exchanges, and will seek to improve the scheme and ensure its effective implementation.

Edward Davey: I do not understand why the Government do not want to introduce the regulations using the affirmative procedure. Is there a reason why they cannot take that route, as it would appear to be the most appropriate one, even though there may have been prior consultation with groups outside the House?

Nick Raynsford: I do not believe that it would be appropriate or precedented. I repeat that there should be a full discussion during the course of the consultation. I extend to the hon. Member for Kingston and Surbiton the undertaking that I gave to the hon. Member for Runnymede and Weybridgeif Opposition Members are concerned about the detail of the regulations and would like an opportunity for debate, I shall certainly use my influence to ensure that that is possible.
	May I move on to the important issues raised by the hon. Member for Runnymede and Weybridge? He asked for clarification of our intention that there should be growth in the tax base. He is right that the key is growth in the non-domestic rate base. If that were just the result of a general uplift, as I have suggested, it would just be a buckshee gain for authorities that may have done nothing at all or even have pursued policies that worked against business investment in their areas. That would not be fair or appropriate if other authorities with much greater difficulties put huge effort into trying to attract business to their areas. Equally, if the scheme was limited to areas of new development, areas that have great difficulty in attracting new development would be penalised, so it must take account of authorities' ability to maintain investment and retain and enhance businesses that might otherwise have left their areas. The scheme would certainly not be restricted to new development, although that would obviously qualify, as it would bring additional rate value to the area.
	I should make it clear that the increases are additionalit is not a question of simply top-slicing the existing national non-domestic rate. A baseline will be important in ensuring that we are talking only about additions that are available under the scheme. If the whole national non-domestic rate pot was treated as a basis for the scheme and top-sliced, irrespective of whether there had been enhanced value, that would diminish the value of the scheme. The aim is to establish an agreed baseline; to continue with the national non-domestic rate and pooling arrangements, as I have already said; and to allow the additional value achieved through the kind of initiatives that I have described to be reflected in the scheme, permitting authorities to retain that additional value.

Philip Hammond: I am not entirely sure how the scheme will work. My understanding is that all national non-domestic rates went into the pot for redistribution, so I am not sure how the Minister will ensure that the pot is the same size after he has allowed some authorities to retain some non-domestic rates. Will he explain that again for those of us who have not been quick enough to grasp it the first time? Is he saying that there will be an annual ratchet? Does a local authority that scores a bit of additional tax base and retains 10 or 20 per cent. accumulate a certain sum forever, or does the ratchet mean that next year it has to run further up the escalator to get anything? Finally, is the Minister saying that there will be no losers, and that every authority will either be in the same position or will be a winner?

Nick Raynsford: The answer to the last question is yes. I have already said that there is no intention to penalise authorities. This is an incentive scheme designed to give an additional benefit to authorities that have either successfully enhanced their non-domestic rate base through positive initiatives or have been able to stem the decline in that base through effective partnership with the private sector.
	The hon. Gentleman asked some interesting questions about the period for which the benefit lasts. We are discussing those issues ourselves at present, and they will be the subject of consultation. There are some interesting policy issues. When there is a revaluation, a rebasing will obviously be needed. If an authority has the prospect of getting the benefit immediately after a new revaluation, but would lose it if the addition came before the revaluation, that would be a perverse incentive. We certainly do not want perverse incentives to affect the timing of schemes to attract new development. Our aim is to ensure that there is a reasonable time in which authorities can derive benefit from the addition, but clearly it cannot be indefinite, as that would involve a curious change in the tax base over a period of years. If any increase accumulated at any point in time there would never be any rebasing. We believe that there must be a rebasing; there must be a period in which authorities can secure the benefit; there must not be scope for perverse incentives. All of that, as hon. Members will understand, will be the subject of full consultation.

Philip Hammond: As the Minister attempts to answer my questions, it is becoming apparent that the scheme will be an incredibly complex mechanism. Can he give the House an order-of-magnitude figure for the sums of money we are talking about? I would caution him against going down a complicated route if, in fact, we are talking about small sums of money. Can he give us an idea of the budgeted figure for the total amount of retained national non-domestic rates?

Nick Raynsford: The hon. Gentleman is making the mistake of assuming that the scheme has already been worked out in fine detail. I have made it clear to the House that it is an exciting proposal introduced by the Chancellor towards the end of last year. It has considerable benefits and advantages, which Opposition Members recognise, and we are keen to ensure that there is a full and thorough consultation during which the scheme can be discussed, refined and improved before we introduce regulations giving effect to it. There is no rushwe are not rushing to introduce the scheme in the near future, and do not anticipate it being in force before 2005, so there is plenty of time for the full discussion and debate that we should rightly have. If we had not proposed the scheme now, and if there is not an appropriate legislative vehicle in the next couple of years, that opportunity may have been lost. It was therefore right to make provision for it in the Bill. At the same time, we accept that the scheme is in its early infancy and needs to be developed and refined.
	As with all matters of local government finance, we will need to establish an appropriate balance between fairness and complexity. If the scheme becomes too complex, it simply will not be worth the candle. On the other hand, if it is seen as rough justice and some of the downsides that we talked about earlier seemed likely to happen, that would undermine confidence in the scheme. That is why we will need arrangements that give the incentives that I described and give a local authority a reward for a reasonable period, but do not produce a distortion over time or perverse incentives. Those are the kind of issues that we will need to explore in the consultation.

Philip Hammond: I understand the need for consultation and the fact that these are complex matters, but I find it alarming that the Chancellor is proposing a scheme of incentivisation, apparently without any idea of what sum has been budgeted to pay for it, so the Minister can give the House not the faintest idea whether we are talking about 10 million, 100 million or 1 billion across all local authorities. Could that rather casual approach to the public finances be the reason why the Chancellor will have to borrow 24 billion in the coming year and 35 billion the year after?

Nick Raynsford: The hon. Gentleman is in danger of getting away from the subject of the Bill. As a result of the prudent management of the country's public finances, we are able, uniquely among major developed countries, to undertake the substantial investment in public services that the Government are delivering. It is sad that the Opposition are committed to a 20 per cent. cut in public service expenditure, which would decimate the public services that we are discussing.

Edward Davey: This seems to be a little debate about some new power that may never be used, as it is such a dog's breakfast. Let me pose another problem to the Minister, so that it can be considered even before the consultation document is written. The business rate tax base could suffer from a cyclical effect: some businesses could come into an area, pay rates for two or three years, and then move out. There is a degree of variability within a particular valuation period, adding further complexities to those that we have discussed. There is a final complexity with which the Minister failed to deal in response to an intervention from the hon. Member for Runnymede and Weybridge (Mr. Hammond) with respect to the central pot. Although it may not be top-sliced, it will lose additional funds because they will go into the scheme under discussion.

Nick Raynsford: If the hon. Gentleman thinks about it, he will realise that if there is an appropriate mechanismI shall not anticipate what precisely that might be, because as I said, these are issues that need to be discussed and finalised following consultationto avoid the short-term cyclical effects that he describes, and to ensure that there is genuine reward for effort to achieve an increase in the tax base without short-term fluctuations, that will make the scheme simpler. If it followed all the short-term movements that he describes, it would be an inherently more complex scheme. The contradiction that he thinks he has found does not exist. It is possible to have a scheme that is relatively straightforwardnot totally simple; I accept that these are complex matterswhich removes unnecessary complexity and which has the advantages that I described.
	The hon. Member for Runnymede and Weybridge asked about section 3A(a) of the Local Government Finance Act 1988. I am pleased to tell him that there is a section 3A(a), and I shall read it to him. It states:
	The Secretary of State may by regulations make provision as regards any financial year
	(a) that a billing authority must estimate at a prescribed time in the preceding financial year and in accordance with prescribed rules whether there is a deficit or surplus in its collection fund for the year and, if so, the amount of the deficit or surplus.

Philip Hammond: Does the Minister happen to know when that was inserted into the Local Government Finance Act 1988? Alarmingly, given that we have to depend on these things, the intranet edition of that Act was prepared on 20 September 2000, so I must assume that the provision to which the Minister refers was inserted subsequently.

Nick Raynsford: I shall ensure that the hon. Gentleman gets a full answer to that question. I can assure him that section 3A(a) exists.
	The hon. Member for Kingston and Surbiton began by saying that he was in a bit of a quandary. That is a normal place for Liberal Democrats to be. Let me reassure him that he just about got there in the end, recognising that the measure is positive and deals with devolving greater financial responsibility to local authorities. We do not agree that there is a case for devolving the entire national non-domestic rate to local determination, for a number of reasons that we can explore on another occasion. We have already debated the matter.
	The balance of funding review that we are initiating soon will look at a range of issues, and I have no doubt that some people may wish to raise the issue in that context. No doubt the hon. Gentleman and his colleagues will continue to press the matter, but there are not just serious technical issues relating to fairness because of the considerable disparity in the non-domestic rate values area by area; there are genuine worries on the part of business, which is not at all attracted by the idea of relocalisation. I have stressed that we are keen to encourage good working relationships between local authorities and business, and we see our proposals as one way of achieving that. I hope that the necessary new clause and the appropriate amendments will be added to the Bill.
	Question put and agreed to.
	Clause read a Second time, and added to the Bill.

New Clause 14
	  
	Standards Committees and Monitoring Officers: Delegation

'(1) In Chapter 1 of Part 3 of the Local Government Act 2000 (c. 22) (conduct of local government members), after section 54 there is inserted
	54A Subcommittees of standards committees
	(1) A standards committee of a relevant authority may appoint one or more subcommittees for the purpose of discharging any of the committee's functions, whether or not to the exclusion of the committee.
	(2) Subsection (1) does not apply to functions under section 55 or 56.
	(3) A subcommittee under subsection (1) shall be appointed from among the members of the standards committee by which it is appointed.
	(4) As regards subcommittees appointed under subsection (1) by a standards committee of a relevant authority in England or of a police authority in Wales
	(a) regulations under section 53(6)(a) and (c) to (g) may make provision in relation to such subcommittees, and
	(b) sections 53(7), (8) and (10) and 54(4) and (6) apply in relation to such subcommittees as they apply in relation to standards committees.
	(5) As regards subcommittees appointed under subsection (1) by a standards committee of a relevant authority in Wales other than a police authority
	(a) regulations under section 53(11) may make provision in relation to such subcommittees, and
	(b) section 54(5) and (7) apply in relation to such subcommittees as they apply in relation to standards committees.
	(6) Subject to any provision made by regulations under section 53(6)(a) or (11)(a) (as applied by this section)
	(a) the number of members of a subcommittee under subsection (1), and
	(b) the term of office of those members,
	are to be fixed by the standards committee by which the subcommittee is appointed.
	(2) In Chapter 5 of that Part (conduct in local government: supplementary), after section 82 there is inserted

Delegation by monitoring officers

82A Monitoring officers: delegation of functions under Part 3
	(1) This section applies to functions of a monitoring officer of a relevant authority in relation to matters referred to him under section 60(2), 64(2), 70(4) or 71(2).
	(2) Where the monitoring officer considers that in a particular case he himself ought not to perform particular functions to which this section applies, those particular functions shall in that case be performed personally by a person nominated for the purpose by the monitoring officer.
	(3) Where a deputy nominated by the monitoring officer under section 5(7) of the Local Government and Housing Act 1989 (nomination of member of monitoring officer's staff to act as deputy when monitoring officer absent or ill) considers that in a particular case he himself ought not to perform particular functions
	(a) to which this section applies, and
	(b) which, by reason of the absence or illness of the monitoring officer, would but for this subsection fall to be performed by the deputy,
	those particular functions shall, while the monitoring officer continues to be unable to act by reason of absence or illness, be performed in that case personally by a person nominated for the purpose by the deputy.
	(4) Where functions to which this section applies are to be performed by a person nominated under subsection (2) or (3) who is an officer of the relevant authority, the authority shall provide the officer with such staff, accommodation and other resources as are, in the officer's opinion, sufficient to allow those functions to be performed.
	(5) Where functions to which this section applies are to be performed by a person nominated under subsection (2) or (3) who is not an officer of the relevant authority, the authority shall
	(a) pay the person a reasonable fee for performing the functions,
	(b) reimburse expenses properly incurred by the person in performing the functions, but only to the extent that the amount of the expenses is reasonable, and
	(c) provide the person with such staff, accommodation and other resources as are reasonably necessary for the person's performance of the functions.
	(3) In section 5 of the Local Government and Housing Act 1989 (c. 42) (designation etc. of monitoring officers), after subsection (7) there is inserted
	(7A) Subsection (7) above shall have effect subject to section 82A of the Local Government Act 2000 (monitoring officers: delegation of functions under Part 3 of that Act)..'. [Mr. Leslie.]
	Brought up, and read the First time.

Christopher Leslie: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 31 and 32.

Christopher Leslie: New clause 14 is an important proposal concerning standards committees and monitoring officers in local authorities and makes two important changes in the regime governing the conduct of local councillors introduced in part 3 of the Local Government Act 2000.
	The first important change allows standards committees of local authorities to create sub-committees. That is necessary because if standards committees are to consider reports of alleged misconduct, it would be fairer and more consistent with human rights for a small tribunalsay, between three and five peopleto constitute the tribunal, rather than the full standards committee.

Philip Hammond: I do not disagree that a smaller committee may be convenient, but I would be fascinated to know where in the Human Rights Act or the European convention on human rights the Minister finds any reference to the size of the tribunal.

Christopher Leslie: I am glad that the hon. Gentleman asks me that. Article 6 of the European convention on human rights states that everyone is entitled to a fair hearing. Some standards committees have 19 members, so there is a risk that such a tribunal would be too large and the case would turn into a show trial. A large tribunal could be intimidating to some members whose case was being considered. Case law suggests that we should make sure that the opportunity for a fairer hearing for those cases is available. We need to make the change in primary legislation so that the regulations can follow.
	The second change allows monitoring officers of local authoritiesthose in local councils who will do the job of investigatingto delegate the function of carrying out the investigation. The provision is needed because monitoring officers can have other responsibilities in local authorities, especially smaller local authoritiesfor example, they may be the local council's principal legal adviser. On occasions monitoring officers may, therefore, have been involved in the very matters to be investigated, possibly having given informal advice earlier to a councillor under investigation. To avoid conflicts of interest, the new clause provides an explicit power for a monitoring officer to delegate those functions to another person.

David Winnick: In recognising the importance of what the new clause proposes on standards committees and monitoring officers, may I ask whether such provision is not all the more necessary in view of the scandal at Westminster? What steps, if any, are the Government taking to get Lady Porter to pay the 26.5 million that the House of Lords has stated that she owes to the London borough of Westminster? Is it not essential that the Government regard that notorious scandal, and Lady Porter's refusal to pay despite her huge fortune, as a matter of concern?

Christopher Leslie: My hon. Friend tempts me to discuss that case in general terms, but, sadly, I do not think that it would be appropriate for Ministers to take on the role of the Standards Board for England and the auditors in respect of that case. As he will know, it is for Westminster city council to pursue any financial matters on its doorstep. We shall see how the council manages to do that job.
	I was speaking about the second important change that the new clause makes. Such changes are known as section 66 regulations, under the Local Government Act 2000, and many locally elected councillors who serve on standards committees, including a number of independent members who have given up their time to do so, have been waiting for some time for changes to complete the standards regime process and allow cases that can be best dealt with locally to be handled at local council level.

Edward Davey: One problem that local authorities experience with standards committees is dealing with an awful lot of trivial, silly and frivolous complaints, often made on partisan grounds, from people in all parties. Will the new clause help to reduce the number of such complaints? If not, when will the Government tackle that problem?

Christopher Leslie: As the hon. Gentleman knows, claims and counter-claims in politics are, I am afraid, inherent in the nature of the business. There is obviously a need to ensure strong guidelines for dealing with frivolous or vexatious claims, especially if they can be dismissed very quickly. Nationally, the Standards Board for England has been carrying quite a burden in terms of the number of complaints, many of which are very minor, if not irrelevant. The board is setting up processes to ensure that it can quickly dispatch its business and clear people against whom spurious allegations have been made.
	Introducing regulations to ensure that a national standards board no longer considers every single complaint and allowing complaints to be quickly delegated to a local level, where they can be dealt with equally speedily by the local standards committees, is the best way of proceeding. I do not think that it would be possible to write into primary legislation some definition of spurious allegations, as the matter is very complex, but it is best and most appropriate that local standards committees can make that judgment.

Edward Davey: Is not part of the problem the fact that various councillors and members of the public can make such allegations cost-free? As they stand to lose nothing, there is almost an incentive in some areas for people to make vexatious claims. The situation may be difficult, but if the Government are prepared to consider complex powers on local retention of rates, they should put their mind to this matter, which is causing real problems and wasting a lot of office time and taxpayers' money.

Christopher Leslie: I hear what the hon. Gentleman is saying, but the tribunals in such cases are not the same as industrial tribunals, where the complainants themselves may have an expectation of compensation in making a complaint against some wrong that was done personally to them. Although cost awards might be appropriate in such cases, I do not believe that they are appropriate in the more civil situation in which complaints are made on the basis of standards and ethics, whether at a national or local level. I believe that we can strike the right balance by giving guidance to standards committees, so that they can dispatch their business efficiently. Indeed, the Standards Board for England is likely to issue guidance across the board on the questions involved, not least of which is whether monitoring officers can delegate functions to other officers.
	As I said, local councils are eager for the local arrangements to come into effect. They now have strong standards committees with independent members, and these workable rules will allow them to get on with the job appropriately should the circumstances arise. I hope that the new clause and amendments will be agreed to.

Philip Hammond: I shall be brief.
	We agree that most cases of misconduct are best resolved at local level. To the extent that the new clause seeks to remove impediments to the underlying intentions framed in the Local Government Act 2000, it is welcome. That prompts the question of why it was tabled on Report rather than being included in the original Bill or tabled in Committee. Will the Minister clarify that point, which is not a last-minute one, as concern has been expressed about it for some time?
	There is also concern that the need to correct deficiencies arising from an Act that was passed only two years ago highlights the dangers of excessive legislative load, inadequate time for parliamentary draftsmen and the curtailed scrutiny and consideration that Bills often receive. I fear that the consequence of that lack of time will be that the Government will have to introduce an increasing number of measures to correct defects in legislation passed only relatively recently.
	I am grateful to the Minister for giving me his interpretation of article 6 of the European convention on human rights and the way in which it militates towards a smaller rather than a larger tribunal. He spoke about a tribunal of three or four people and cited the example of a committee of 19 as excessive in terms of that article. It might be reassuring if he would confirm that he does not regard 12 members as excessive for a properly constituted tribunal in the terms of article 6. It could have serious ramifications for our legal system if he feels that 12 is excessive,. I look forward to his comments.
	I must again take a few moments of the time of the House to make a couple of drafting points of the type that would have been made in Committee if the same provisions had been considered there. New section 82A(4) to the Local Government Act 2000, as set out in the new clause, provides that where the
	person nominated . . . is an officer of the relevant authority
	he will be afforded
	such staff, accommodation and other resources as are, in the officer's opinion, sufficient to allow those functions to be performed.
	Where a third party is nominated to carry out the functions, however, subsection (5)(c) provides that he will be afforded
	such staff, accommodation and other resources as are reasonably necessary for the person's performance of the functions.
	The criterion of being reasonably necessary is a rather better one than is provided in subsection (4). It is an objective criterion and I cannot see any obvious reason why a local government officer should be deemed able to determine the resources that he needs for himself, apparently without any qualification of reasonableness, while a third party is afforded only those resources that are reasonably necessary. Perhaps the Under-Secretary would like to examine that with a view to ascertaining whether, when the Bill reaches the other place, it could be amended to apply the reasonably necessary criterion in both cases. I have no other substantial points to make about the new clause.

David Winnick: I support the new clause, which is necessary. I work on the assumption that most local government business is conducted honestly and I have no reason to believe otherwise. Clearly, a monitoring system is essential; I wish that one had existed previously. If such arrangements had been in place some years ago, the scandal at Westminster council could have been avoided. It is no good the hon. Member for Runnymede and Weybridge (Mr. Hammond) disliking remarks that reflect badly on his party; they cannot be avoided.

Philip Hammond: It is not a question of my disliking the hon. Gentleman's comments. I should simply be grateful if he extended their scope to include all the scandals in Labour-controlled authorities in the past 20 or 30 years.

David Winnick: It is up to Conservative Members to do what they consider appropriate; I am dealing with a specific issue.
	If we believe that councillors' behaviour should be above board, it is essential to provide some guidelines. We know the district auditor's findings for Westminster council: 250 council properties in eight marginal wards were sold purely to try to obtain Conservative votes. That was unlawful, and that is what the district auditor found.

Andrew Turner: Will the hon. Gentleman give way?

David Winnick: In a moment.
	The most important point is that the House of Lords found last year that Westminster council's conduct was unlawful. The highest court in the land concluded that Lady Porter's actions were unlawful. The sum involved is 26.5 million plus interest. When the issue was raised with the Conservative Government, the then Prime Minister and other Ministers said that they did not want to make a judgment or any comments until the legal process had been exhausted. That has happened. It is unfair that councillors can be surcharged, albeit small amounts, when the former leader of Westminster council can get away with not paying 26.5 million.

Philip Hammond: On a point of order, Mr. Deputy Speaker. We are discussing an amendment to an Act that was passed in 2000, long after the events that the hon. Gentleman describes. Are they relevant to the debate?

Mr. Deputy Speaker: That is not a point of order for the Chair. However, I say to the hon. Member for Walsall, North (David Winnick) that we are considering changing structures, and not individual cases. I believe that he has made the point that he wanted to make and gone far enough down that road.

David Winnick: I am grateful for your guidance, Mr. Deputy Speaker. I shall give way shortly to the hon. Member for Isle of Wight (Mr. Turner), who wanted to intervene earlier, but I want to make the point that if the structures had been in place at the time, the scandal that I mentioned would probably not have occurred. I therefore do not understand why the hon. Member for Runnymede and Weybridge is so upset. I should like him to condemn from the Dispatch Box Lady Porter's refusal to pay the money involved.

Andrew Turner: My comments may be superfluous in view of your guidance, Mr. Deputy Speaker. I merely wanted to say that if the structures had been in place in the 1940s, Herbert Morrison might not have vowed to build the Tories out of London.

Mr. Deputy Speaker: Order. Hon. Members are straying further and further from the new clause. We should revert to it.

David Winnick: I simply ask my hon. Friend the Under-Secretary to condemn what occurred and say whether he is reasonably satisfied that the new arrangements would prevent the sort of scandal that happened in Westminster. Preventing such scandals is essential for maintaining standards in public life. I also hope that the Conservative spokesman will condemn Lady Porter's refusal to pay the money involved. It is a simple request and I hope that it will be fulfilled.

Edward Davey: The Local Government Association has considered the new clause and given it cross-party support. That is relevant to our debate and decision on it.
	I was disappointed by the Under-Secretary's reply to my intervention. He said that the provisions will not tackle the problem of vexatious complaints and that he is not minded to deal with that. He should reconsider.
	There is no problem with the specific proposals and I add my support to the comments of the hon. Member for Runnymede and Weybridge (Mr. Hammond). Proposed new section 82A(4) refers to staff being sufficient in the officer's opinion. I, too, believe that that should be subject to a reasonableness test. Officers might decide that they wanted a suite of accommodation and a range of support staff. Although an officer's decision could probably be reviewed, the process would be costly and time-consuming. It would be much simpler if we added the word reasonable in the appropriate place to ensure a balance and that taxpayers' money is not wasted.

Andrew Turner: Does the hon. Gentleman remember that, in Committee, the Under-Secretary implied that reasonableness was built into almost any provision in any legislation? I am not sure whether he is currently operating on that basis. If so, it prompts the question of why reasonable appears in some places but not in others.

Edward Davey: Indeed. That is why the hon. Member for Runnymede and Weybridge and I made that point. The hon. Member for Isle of Wight (Mr. Turner) will have noted that the phrase reasonably necessary appears in proposed new section 82A(5)(c). There appears to be some confusion among those who drafted the Bill and in the Minister's thinking. That is a small point and we do not want to press the new clause to a Division because of it, but I hope that the Minister will accept it and ensure that the measure is corrected before it appears on the statute book.

Robert Syms: I endorse the comments of the hon. Member for Kingston and Surbiton (Mr. Davey). Sub-committees are sensible because they can deal fairly speedily with any allegations against someone. People are busy, and convening a full committee can prove difficult. I therefore believe that the new clause may speed up justice in the case of a complaint. That is sensible.
	The point about vexatious and frivolous complaints is significant. There are approximately 20,000 councillors in Britain but, given that number, scandals are rare. All parties have occasionally been touched by scandal, but few councillors are locked up in jail. Some are, but most are honest and diligent.
	Under the current structure, party political groups tend to level complaints on a tit-for-tat basis. For example, a row happens in the council chamber and a complaint is made to the monitoring officer or the standards committee. I had experience of local government a few years ago and I have contacts today. I am always surprised by the frivolity of the complaints. One party starts, the other responds and the complaint keeps going. Guidance should include a reporting system to enable us to identify frivolous or vexatious complaints. They waste much time and effort in local government, which has many better things to do.
	I am sure that monitoring officers will be pleased that they can delegate their functions. Some find themselves in the political position of being bombarded by complaints from various groups. They will be pleased to pass on their responsibilities when they can do that.

Matthew Green: The hon. Gentleman mentioned spurious complaints by councillors from both sides. I know of at least a couple of councils where senior officers used the threat of reports to the monitoring officer to try to keep their councillors going down the route that they would like. I am afraid that we see far too much of that officer-led situation in councils. Is the hon. Gentleman aware of any similar circumstances?

Robert Syms: I was not aware of that, although the hon. Gentleman makes a good point.
	This sours relationships in local government and takes up an awful lot of time. The Minister said that the national committee has many frivolous matters referred to it. That should be made clear. Even if there were not to be a system of fines, there should at least be some system of monitoring and naming people who level frivolous or vexatious complaints, especially if they have a track record of levelling complaints that are not upheld.

Christopher Leslie: We have covered a large number of issues in a short time, which I welcome. In response to my hon. Friend the Member for Walsall, North (David Winnick), I agree that there were several serious cases historically that led to the Government taking a strong decision to make structural changes in relation to improving standards and ethics in all levels of public life, not least in local government. Several cases gave grounds for laying the foundations for some of those changes. In the case of Lady Porter, it was the auditor who concluded that there had been scandalous misconduct in that authority. That is well known and on the record. My hon. Friend made the point extremely forcefully.

David Winnick: The Minister will know that that decision has been upheld by the House of Lords, the highest court in the land. As I said, Lady Porter owes 26.5 million plus interest, and she is obviously finding outlets in various parts of the world so as not to have to pay the money owing to the London borough of Westminster.

Mr. Deputy Speaker: Order. May I repeat to the Minister what I said to the hon. Gentleman when he addressed the Housethat I would rather he did not pursue that matter any further?

Christopher Leslie: The matter stands on the record, then, Mr. Deputy Speaker.
	The hon. Member for Runnymede and Weybridge (Mr. Hammond) raised a number of issues. First, he asked why these changes were not anticipated at an earlier stage, perhaps in Committee. We have here a completely new regime for identifying misconduct, carrying out investigations, conducting hearings, imposing sanctions and so forth. The regulations governing the regime need to provide for fairness and efficiency across the wide variety of circumstances that might arise in each different local authority. That makes the regulation process somewhat complex. The need for the changes that we propose was identified following extensive consultation that we undertook, particularly last summer. We tabled the amendments in response to issues that were identified by the Standards Board for England and by monitoring officers and standards committees around the country.
	The hon. Gentleman asked me to clarify whether 12 people were too many for a tribunal or, indeed, a jury. It was certainly not my intention to suggest that that number was excessive. I was trying to explain in a more sophisticated manner that it is important locally that standards committees have the opportunity to set up sub-committees so that the nature of the tribunal can most appropriately reflect the nature of the allegation in question.
	The hon. Gentleman made a well-spotted point in noting that the new clause contains differing descriptions of the resources that can be allocated to monitoring officers who are undertaking an investigation and those that can be allocated to people who are delegated the function as a third person and who will have the resources that are reasonably necessary rather than simply sufficient to perform the function. That provision is there because it would not be right to give someone who is not an employee of an authority the automatic right to specify what resources the authority should provide. A situation involving a council employee, with the normal constraints in respect of ensuring that they have the necessary resources, differs from that involving somebody, say, from a neighbouring authority having a blanket right. That was the rationale behind the different phrases in the new clause, but I shall certainly look at that issue again to check that it does not give rise to any problems.
	I am grateful to the hon. Member for Isle of Wight (Mr. Turner) for helpfully pointing out that, in general, the reasonableness test under the Wednesbury principle should also apply to any activities and judgments of public officials. That point was also raised by the hon. Member for Kingston and Surbiton (Mr. Davey).
	The hon. Member for Poole (Mr. Syms) made some important points about spurious or frivolous cases. It is important in any political situation that we allow complaints to go forward and that we do not put hurdles in their way. Although he may feel that too many cases concern allegations that are not well founded, some are genuinely and earnestly made, and we should not inhibit them. However, we also have to strike the right balance in ensuring that spurious complaints that are proved to be such can be dismissed quickly. In terms of inter-party banter, the public are pretty sophisticated and well able to make their own judgments about such allegations.
	These are important provisions for raising standards in the ethical structures in local government and I hope that they can stand part of the Bill.
	Question put and agreed to.
	Clause read a Second time, and added to the Bill

New Clause 3
	  
	Use of Housing Capital ReceiptsReserved Portion

'(1) This section applies to capital receipts paid to the Secretary of State pursuant to section 11(2)(b).
	(2) The Secretary of State shall pay to each local authority which makes a payment to him of a capital receipt pursuant to section 11(2)(b) a special grant equivalent to fifty per cent. of such capital receipt paid to him for the use by the local authority solely for the purposes of
	(a) defraying the cost of capital works to any building or land in relation to which the local authority is or has been subject to a duty under section 74 of the Local Government and Housing Act 1989 (c. 42); and
	(b) securing the provision of housing within the local authority area by a registered social landlord in respect of which the local authority shall have the right to nominate the occupier.
	(3) Any grant which falls to be paid by the Secretary of State pursuant to subsection (2) above shall be paid in the financial year in which the Secretary of State receives the payment from the local authority pursuant to section 11(2)(b) in relation to which the grant becomes payable.'.[Mr. Hammond.]
	Brought up, and read the First time.

Philip Hammond: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to discuss the following:
	New clause 6Empty homes
	'.(1) The information obtained in relation to council tax on empty homes shall not be used to require the owner of an empty property that is in reasonable repair to give up the freedom to enjoy and manage that property as the owner wishes.
	(2) Any amount raised by levying Council Tax on an empty home will be retained by the billing Authority and there shall be no substitution of any grant, subsidy or money due from central Government as a result of such a change.'.
	New clause 7Housing Revenue Account
	'.The Secretary of State shall make an annual report to Parliament on the operation of section 90 (under which a local housing authority is required to pay to the appropriate person an equivalent amount of the Housing Revenue Account subsidy in which a negative figure occurs) stating
	(a) for each local housing authority
	(i) the amount involved, and
	(ii) the amount by which rents in that authority would rise because of the operation of this clause; and
	(b) to which local housing authorities he has made payments as a result of their Housing Revenue Accounts being in deficit and how much their rents are reduced because of the operation of that section.'.
	New clause 16Repayment of overhanging debt
	'The Secretary of State shall make an annual report to Parliament detailing
	(a) the amounts paid or contemplated to be paid pursuant to sections 40 and 41; and
	(b) the effects of such payments on rents in relation to the voluntary transfers of council housing'.
	Amendment No. 43, in page 5 [Clause 11], leave out lines 38 and 39.
	Amendment No. 44, in page 5, line 38 [Clause 11], leave out
	'equal to the whole or any part'
	and insert
	'up to a maximum of 50 per cent.'.
	Amendment No. 4, in page 48, line 31 [Clause 92], leave out subsection (1).
	Amendment No. 35, in page 48, line 34 [Clause 92], leave out subsection (2).
	Amendment No. 36, in page 73, line 12 [Clause 125], leave out '92(1)'.

Philip Hammond: This group of new clauses and amendments addresses one of the key issues of the Bill, which was discussed in some depth in Committeeat least, in as much depth as the timetable motion permitted. The Government say that the Bill is about delivering freedoms and flexibilities to local authorities, but their actions on capital receipts, the associated debt and local authority housing grant demonstrate exactly the opposite as far as prudent, debt-free authorities are concerned. In fact, the whole approach of the first part of the Bill, mirroring the Government's conduct of their own finances, is to abandon prudence, to punish debt-free authorities and to encourage borrowing, while increasing the power of the Secretary of State in the allocation of funding by expropriating the capital receipts of local authorities from right-to-buy sales, as clause 11 seeks to do.
	The Select Committee that considered the Bill in draftone of the early examples of the draft Bill procedurerecommended that clause 11 be deleted. The Government have rejected that recommendation, which represents an early defeat for the concept of consideration of Bills in draft. We have seen draft regulations in relation to clause 11, and they have been much discussed. We know that the Government intend to sequester 75 per cent. of the capital receipts that local authorities receive from right-to-buy sales and 50 per cent. of those obtained from other transactions. The Government use language such as pooling and redistribution. Their notes on the clause talk about taking this money in order to redistribute it. However, nobody reading the Bill will find any reference to redistribution or pooling; they will find that the 75 per cent. tax on local authority capital receipts has to be
	paid to the Secretary of State.
	Clearly, these moneys will not be available to the surrendering local authority, but what assurance do we have that they will represent net additional money at all? The Treasury, as we all know, has its own little local difficulties. It is far from apparent to me that when the Treasury and the Office of the Deputy Prime Minister formulate the overall local authority finance settlements for next year and the two subsequent years, all the money that has been skimmed off in this way will be treated as an additional resource, rather than as a substitute resource for money that would otherwise have been made available to areas in need, from central Government funding.

Edward Davey: The hon. Gentleman and I agreed on many aspects of this issue in Committee, but can he clarify whether, compared with the previous regime, the change that the Government propose will hit only debt-free authorities? The previous regimeit was a Conservative oneprevented many local councils from keeping their own capital receipts. Under the Conservatives, non-debt-free authorities had to pay them to the centre.

Philip Hammond: I am grateful to the hon. Gentleman for his expression of general support. Indeed, I am glad about that because he has added his name to new clause 3, so we would expect him to support it. He is right, of course, that the principal burden of clause 11 falls on the 34 debt-free authorities.

Nick Raynsford: It falls on 18 authorities.

Philip Hammond: In saying that, the Minister is arguing that it is debt-free authorities with housing stock that the provision hits most substantially. However, it is my understanding that it will impact on indebted local authorities, to the extent that the Government do not chooseas they are empowering themselves to do through other provisions in the Billto pay off their debts for them.

Nick Raynsford: The hon. Gentleman tries to draw a distinction between debt-free authorities that have housing stock, and those that do not. How can housing authorities that do not have any housing stock possibly benefit from capital receipts from house sales?

Philip Hammond: Of course they cannot benefit from capital receipts from housing salesI was merely trying to contend with the Minister's constant chuntering from a sedentary position. I referred to 34 authorities and he replied with 18, and I was perhaps second-guessing some rationale for his figure. My understanding is that 34 debt-free local authorities will be particularly affected by these measures, but if the Minister has a different view, he will doubtless make his point in due course.
	The Government argue that not all local authorities in receipt of capital receipts have chosen to reinvest them in housing assets, and to a limited extent that is true. That is called local decision making, but the power in the Bill is a power to tax local authorities, not an obligation to pool and to redistribute, over and above existing housing capital funding.

Peter Luff: As one of those who did not have the privilege of serving on this Bill in Committee, I wonder whether my hon. Friend can explain a little about the retrospective nature of the Bill's provisions. Wychavon district council, which is in my constituency, sold its housing stock some five or six years ago and repaid all its debts. It now has a substantial cash balance. Does he have any concerns about the Bill's implications for authorities such as Wychavon?

Philip Hammond: My hon. Friend raises an interesting point. [Interruption.] The Minister is chuntering from a sedentary position again. He seems to have an obsession with saying what I am about to say before I can say it.

Nick Raynsford: I am trying to help the hon. Gentleman.

Philip Hammond: I am grateful to the Minister for his assistance. I do not think that clause 11 will pose any threat to those receipts, but I draw the attention of my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) to the concern of many local authorities with positive capital balances that changes in the funding formula, and in the general tenor of the Government's approach to local authority finance, present the constant threat that unjust account will be taken of those capital funds, in such a way that the grant funding available to those authorities will be reduced.
	The existing system of housing capital funding is itself being scrapped, of coursea point that I shall return to in a moment. The Government's second argument is that the stock that is being sold was originally financed centrally. Well, perhaps it was, but many debt-free authorities have received negative housing subsidy for years. It is their tenants' rent and their council tax payers' tax that has, over generations, built up the equity that exists in the housing stock that they are disposing of todaythrough investment, improvements, maintenance of stock, and repayment of debt.
	So both the Government's arguments fail. If one believes in local democracy and the freedoms for local authorities that Ministers laughably proclaim this Bill is about, reinvestment of capital receipts from right to buy should be a local decision. The equitable ownership of the assets lies with the local community, not with the Secretary of State. The sequestration of one community's assets, even if for redistribution to another, is the antithesis of responsible and empowered local government. It is just another crude attempt by the Government to reinforce the clear thrust of their local government finance policy: to snatch from those authorities wicked enough to be prudent, well run, low taxing and debt free, in order to bail out the hopeless, the feckless and the profligate. That policy will result in average band D council taxes for the coming financial year on the homes of ordinary hard-working families in England exceeding 1,000 for the first timea point which my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) has made.
	Debt-free local authorities currently have the freedom to reinvestor not, as they choosetheir receipts from capital disposals. They, of course, will bear the brunt, but I should be grateful if the Minister would touch on the complex issue of how this measure impacts on indebted authorities. I am ready to stand corrected, but my understanding is that the notional income from set-aside receipts offsets the notional cost of the underlying debt that financed the assets that gave rise to those receipts. The Government seem to be recognising that problem in this Bill by taking powers to themselves to clear local authority debt; indeed, we shall be discussing overhanging debt in a moment. However, it appears that a local authority that has debt will have its receipts not set asideblocked, in essencebut sequestered by the Government. It will be dependent on the largesse of the Secretary of State to clear its paper indebtedness, at least. Perhaps the Minister will clarify how that process works when he winds up the debate.
	As ever, in Committee we approached this issue in the spirit of constructive compromise. We tabled amendments that recognised the Government's agenda, while resisting the extent of the asset grab that they proposed. We tried to reduce, or to limit, the percentage of the capital receipt that could be taken by the Secretary of State. We tried to ring-fence part of the local authority receipt for reinvestment in housing and regeneration within that local authority area, thus addressing one of the Government's principal purported concerns. I am afraid to say, however, that all that was in vain. The Government proved determined to attack the freedoms of debt-free authorities, and to undermine the right to buy from all sides. That is demonstrated in this Bill, which allows deduction of local authority housing and regeneration investment before the tax is calculated for other capital receipts, but not for right-to-buy receipts.
	If we set clause 11 in the wider context, it is apparent that the Government are putting together a system whereby they sequestrate 75 per cent. of capital receipts from right to buy. At the same time, the right to buy itself comes under attack, in the form of a reduction in discounts, and in a clear policy agenda that seeks to limit the opportunities for ordinary hard-working families to benefit from right to buy.
	Secondly, there is the introduction of a discretionary grant system, whereby the Secretary of State will pay off local authorities' indebtedness where he sees fit. Thirdly, we are all aware of the abolition of the local authority social housing granta measure that was well trailed but that all local authorities, without exception, understood was intended to come in on 1 April 2004. With some horror, local authorities have become awarealthough they have yet to receive the courtesy of direct information from the Office of the Deputy Prime Ministerthat local authority social housing grant will, in fact, be withdrawn on 1 April 2003. They became aware of that by being copied in on a letter from officials in the Office of the Deputy Prime Minister to the Housing Corporation on 8 February 2003, just three weeks before they were required by law to have set their budgets. That has caused chaos. It smacks of political vindictiveness or fiscal panic on the part of the Office of the Deputy Prime Minister. The Minister is shaking his head, so no doubt he will be defending the Office of the Deputy Prime Minister's lamentable performance in communicating with local authorities about the abolition of local authority social housing grant on 1 April 2003. Taken together, all those facts add up to a very curious idea of freedom and flexibility.

Edward Davey: The hon. Gentleman has probably seen today's written ministerial statement by the Under-Secretary of State, Office of the Deputy Prime Minister, on the local authority social housing grant. Does the hon. Gentleman agree that this episode suggests a degree of incompetence in the Office of the Deputy Prime Minister that is extremely worrying? It is clear that local authorities did not expect the grant to be phased out until April 2004. Does the hon. Gentleman agree that the announcement that it will be phased out in 2003 has, in many areas, left plans for developing more affordable homes in utter chaos?

Philip Hammond: The hon. Gentleman is right. The announcement left councils reeling just a couple of weeks before they were due to present their budgets. There has been no clear indication of what the transitional arrangements are to be. There has been an indication that there will be transitional arrangements, but no information has been offered to allow individual authorities to assess which of their schemes will be eligible for the arrangements and which will not. That has led to what I can only describe as outrage among local authorities. The offence has been compounded by the utter discourtesy of the Office of the Deputy Prime Minister in copying in local authorities on an e-mail from an official to the Housing Corporation. There was no effort to follow that up by direct communication with the local authorities. When I contacted the office of the Minister responsible for housing immediately after this fiasco had become known to me, I was told that there would be no chance of any direct communication in the following weekthe week when the House was in recessand that the earliest that any communication would be made would be in the week the House resumed. To my knowledge, nothing has yet gone out to local authorities.

George Young: My hon. Friend may know that Test Valley borough council is one of the many councils to have been caught up in this. The council has written to the Office of the Deputy Prime Minister. Does my hon. Friend agree that the only satisfactory transitional arrangement would be one that put the local authority back in the position it thought it was in before the communication went out?

Philip Hammond: My right hon. Friend is right. A number of local authorities have suggested to the Office of the Deputy Prime Minister that the only fair transitional arrangement will be one that recognises all projects that were in local authorities' financial statements and plans at or around 10 February. From the financial information that I have seen on the amount of money available for transitional arrangements, it is clear to me that the Government will not allow anything like all of those projects to slip under the wire.

Matthew Green: In the information on the transitional arrangementswhich has been placed in the Library todayit is clear that, instead of the 500 million provision that had been expected for this year, debt-free authorities will find that their provision has been graciously increased from 175 million to 275 million. Instead of a year, they are being given an extra three monthsup to 30 Juneto get schemes, together with their planning permission, through. That will allow some schemes to go ahead, but the statement by the Under-Secretary of State, Office of the Deputy Prime Minister, says:
	We do however need to ensure that the funding limits are not exceeded. If the total claims submitted by 30 June exceed the money available, the Housing Corporation will prioritise schemes with the Government Offices in terms of their contribution to the regional housing priorities.
	In other words, if the limit is exceeded in my area, it will be the Government office for the west midlands that decides who will get the go-ahead.

Philip Hammond: I am grateful to the hon. Gentleman, who is absolutely right. I have not seen that statement, and I query why it should be necessary for Ministers to table, only this morning, written ministerial statements that are obviously relevant to today's debate. When that sort of thing happens, hon. Members do not have the opportunity to examine them and discuss them with local authorities. I know from copied correspondence that I have seen that many local authorities have already invested substantial amounts of money and time in projects that will certainly not clear the hurdle that the hon. Gentleman has just informed us has been set in the written ministerial statement. That is a very serious matter. Not only its substance but the way in which it has been handled do no credit at all to the Office of the Deputy Prime Minister. The Minister for Local Government and the Regions is not, of course, directly responsible for such matters; I am sure that he would have handled them in a way that was not so grossly discourteous to local authorities. He will know that this debacle has done a great deal of damage to the relationship between his Department and local authorities.

Michael Jack: Does my hon. Friend feel that, because of the state of the public finances, the actions that have been taken smack of late intervention by the Treasury? Virtually no analysis has been done of the effect of these proposals on councils, which can only move at a certain pace with future housing developments. The whole approach destroys any idea of legitimate expectations.

Philip Hammond: My right hon. Friend is right. As he points out, local authorities have been placed in an impossible position. They have been planning, spending, making progress with projects and preparing their budgets, only to find that many of their activities have been put under a shadow on very short notice and without any official notification.
	The signals from Government are utterly confusing. At the beginning of February, we heard the Deputy Prime Minister batting on about the need to build more affordable housing. In some areas, the need to build more affordable housing and to develop sustainable communities is desperate. At the same time, local authoritieswhich believed that they had been doing precisely the bidding of the Government in negotiating with their registered social landlords and in working up schemes to provide precisely such affordable and sustainable housing developmentshave found that the rug has been pulled from under them without even the courtesy of a phone call. They have been left to pick up the pieces and, in many cases, the costs that they have already incurred.
	The Government have given us a curious idea of what freedom and flexibility mean. They seem to mean that the Government take one's assets, cut off one's entitlement to grant funding for one's social housing programme, and replace that funding with grants that are at the discretion of the Secretary of State. At worst, that is open to any kind of gerrymandering; at best, it represents a huge increase in bureaucracy and a loss of local autonomy and accountability, as local authorities are forced to supplicate at the altar of the Deputy Prime Minister for funding for regeneration and social housing schemes.
	Clause 11 hands the Government an 800 million pork barrel that is financed by council tenants and council tax payers. That may be why the hon. Member for Dagenham (Jon Cruddas), who I am pleased to see is here, was able to vote with the Government in favour of clause 11, even though his own local authorityBarking and Dagenhamwill be the single biggest loser, losing 12 million of capital receipts. Perhaps he has been given an assurance that the Secretary of State's largesse will extend to Barking and Dagenham, and his council will not be out of pocket. So much for the Secretary of State's open-minded and objective approach to funding decisions.
	2.30 pm

Andrew Turner: Does my hon. Friend agree that the Minister's body language may tell us more than his words? [Interruption.] He is now trying to appear open and wise. When my hon. Friend makes a point with which the Minister disagrees, he smiles like a crocodile and shakes his head vigorously. However, when my hon. Friend makes a point with which the Minister cannot in honesty disagree, such as the remark about the promises to the hon. Member for Dagenham (Jon Cruddas) or about the Treasury's intervention in the social housing grant, the Minister hunches up, buries his nose in his papers and scribbles notes.

Philip Hammond: I do not have the expertise that my hon. Friend obviously possesses in the analysis of Ministers' body language. This particular Minister's body language is usually smiling, and I find it difficult to read anything into that, although I have discovered that smiling does not necessarily indicate agreement with or approval of what is being said. I look forward to my hon. Friend's continued interpretation, as I may find it helpful.
	New clause 3 is a further attempt at compromise, following the attempts that we made in Committee and that were rejected by the Government. I am delighted that the Liberal Democrats have decided to support the new clause. It proposes that the Secretary of State should pay a mandatory special grant for social housing provision and repairs to housing stock, equivalent to 50 per cent. of what is received under the provisions of clause 11. Effectively, new clause 3 provides that 25 per cent. of right-to-buy receipts would remain in the hands of the local authority, with no restrictions on its use; 37.5 per cent. would come back to the authority in a ring-fenced special grant to be spent on social housing and repairs to stock; and 37.5 per cent. would go to the Secretary of State for redistribution, if he is generous, or to be swallowed up into the Chancellor's black hole, if he is ungenerous. More than half the receipts would remain with or return to the local authority. That is a compromise position that any reasonable Government would accept. Unless the Minister will accept it, all we have on offer from him is a set of transitional arrangements that reject the arguments in principle against this centralising measure.
	During the debate in Committee, we touched on the question of receipts other than in the form of cashin particular, in the form of nomination rights. For example, a local authority might transfer assets to a registered social landlord in exchange for nomination rights to the tenancies in those assets. The Opposition amendment in Committee proposed that such receipts should be excluded from the sequestration process.
	The Bill would require local authorities to value such nomination rights and pay a levy to the Secretary of State, in cash, on receipts that have not been received in cash. That would present serious problems for local authorities. To the Minister's credit, he recognised that that was not the Government's intention, but he did not accept the amendment because he noticed many loopholes and possibilities for evasion by local authorities of his taxing plans. He said:
	I cannot give the hon. Gentleman an absolute guarantee that we will be able to produce revised regulations in time for Report stage, but that is only because of the considerable number of other pressures under which we are working.
	There is obviously too much legislation. He continued:
	I undertake to write to the hon. Gentleman, setting out our thoughts on how we might address this conundrum and I will copy that letter to all Committee members.[Official Report, Standing Committee A, 28 January 2003; c. 145.]
	I am wary of accusing the Minister of not having written to me, because I did so once before and returned to my office to find the letter on the doormat. However, I have not received a letter, and I have spoken to some hon. Friends who are also not aware of having received one. I see from the body language of the hon. Member for Kingston and Surbiton (Mr. Davey) that he has not received one either[Interruption.] Well, I see it from his raised eyebrow language.
	We needed to see how the Government intended to deal with the issue before we returned to the subject on Report. In the absence of any revised draft regulations, we needed at least to have the Minister's thoughts set out for us. If he has not been able to set them out in writing, perhaps he will take a little extra time and trouble to set them out in detail when he replies to the debate.
	The second issue that I wish to raise with the Minister is the situation relating to new towns. Currently, the sale of stock transferred originally from the Commission for the New Towns or English Partnerships to new town local authorities is subject to a clawback, equivalent to 75 per cent., to English Partnerships. The Minister will know that there was a debate last week in Westminster Hall to which his colleague, the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Harrow, East (Mr. McNulty), responded. In that debate, I raised the following question. The Government's response to the Select Committee's report on new towns, their problems and future, states:
	English Partnerships will discuss with the individual local authorities the issue of assets and liabilities, including clawback. In some circumstances, and with the agreement of the Treasury, English Partnerships might waive clawback or transfer the right to receive clawback to the respective local authority.
	I asked the Under-Secretary how that process interfaces with the arrangements that are now being put in place for the Secretary of State to take 75 per cent. of all capital receipts, and I wish to put the same question to the Minister. The irony is that the new towns have long campaigned for the abolition of clawback on the basis that it would give them equal treatment with all other authorities. They will have equal treatment, but only by subjecting all other authorities to the clawback under which the new town authorities have laboured for so long.
	Will the clawback waiver by EP actually operate and, if so, will the receipt that the local authority obtains be subject to the clause 11 sequestration process? If so, English Partnerships will give, only for the Secretary of State to take away. That would be a meaningless exercise. If what the Government said in their response to the Select Committee's report stands, and the new towns are exempt from the process by the waiver of clawback in specified cases, it represents a large and partisan hole in the Bill. After all, all but one of the new town authorities are controlled by the Labour party. I would be concerned if the Government were introducing a different regime for the new towns compared with all other authorities, effectively exempting some Labour-controlled authorities from the pain that they are inflicting on all other authorities. I look forward to the Minister's response on that issue.
	New clause 6 is an attempt to probe the Government on the recently announced power of forced letting. It seeks to prevent information from council tax records being used as a base for a programme of forced lettings of empty property. I have two questions for the Minister. Will there be an appeal mechanism for anybody whose property is subjected to the proposed enforced letting process? Will a person who does not wish to become a landlord have the right to require the local authority to compulsorily purchase a property identified for compulsory letting?
	The Government's proposals on compulsory letting represent a massive infringement of the rights of private property. The Government and Labour Members are very keen on the human rights agenda, but they cannot pick and choose from it. One of the rights guaranteed by the European convention is the right to private property. Will the Minister confirm that the Government have received specific advice that the compulsory letting of private property with no option to require its compulsory purchase would not breach rights under the convention?

Edward Davey: Will the hon. Gentleman say more about why the Conservatives are so against compulsory leasing, when previous Conservative Governments have introduced legislation to promote compulsory purchase? Will he explain the difference, as he sees it?

Philip Hammond: I hope that all hon. Members would find any notion of compulsion slightly unsavoury, as I do. It is always better if these things can be done without compulsion. Clearly, however, compulsory purchase powers will be needed in some cases. The owner of a property may require a local authority to acquire the property, but that is different from the owner being legally required to become a landlord when he does not want to, and having no option to require the local authority to purchase the property. The distinction is clear. I hope that the Minister will explain the Government's intentions in the matter.
	New clause 6(2) would establish that empty home receipts should go to local authorities rather than directly to the Government. At present, 160 million in such receipts goes to the Government, and the new clause would bring the procedure into line with what the Government propose in respect of second homes. It would also bring the procedure into line with the incentive system that the Government have extolled in relation to new clause 10.
	New clause 7 relates to clause 90, which deals with negative housing revenue account surplus. The explanatory notes say that the subject is not well understood. That is masterly understatement. The Minister will do well to find anyone who understands the concept at all, although my right hon. Friend the Member for North-West Hampshire (Sir George Young) may be one of the few in the House who qualifies.
	Clause 90 requires a local authority to pay any negative housing revenue account subsidy to the Secretary of State. The notes say that that represents no change, and that it is required simply to deal with changes in the treatment of rent rebates.

Nick Raynsford: indicated assent.

Philip Hammond: The Minister, in his customary helpful fashion, confirms that.
	Members of Parliament are required to be suspicious, and new clause 7 therefore would require the Secretary of State to report to Parliament about the amounts paid in negative housing revenue account subsidy to him by each local authority. That would allow the House to see what the distribution effect is and, I hope, corroborate the Minister's assertion that nothing has changed.
	New clause 16 addresses clauses 40 and 50. As part of its centralising approach, the Government must deal with the question of local authority indebtedness, in respect of stock whose sale receipts are to be sequestered by the Secretary of State. This is a matter for indebted, not debt-free, authorities. Currently, indebted authorities have to set those receipts aside, but the Government are proposing a tortuous system: the Secretary of State will take the receipts, and then the loans will be repaid, on behalf of the local authorities, by the Secretary of State. However, as I understand it, that repayment will remain at the Secretary of State's discretion.
	The powers to make the regulations appear later in the Bill. They are framed specifically to give the Government the power to make different regulations applicable to different types of authorities, or to authorities in different areas or regions. That strikes me as an especially dangerous power for the Government to have. Again, it is the antithesis of genuinely local government and proper local financial controls. It would give the Secretary of State huge power, and the ability to exercise largesse towards favoured local authorities.
	New clause 16 would force the Secretary of State to report to Parliament the amounts paid under clauses 40 and 41, and to assess any effects on rents in respect of transferred properties. For example, local authorities that discover that the Secretary of State is not likely to clear their debts may have to hold out for a higher price so that they can continue to service outstanding indebtedness. I hope that the Minister will respond to that point.
	Liberal Democrat amendments Nos. 43 and 44 are essentially another way to address the iniquity of clause 11. I hope that the hon. Member for Kingston and Surbiton (Mr. Davey) will throw his weight behind new clause 3, and not find it necessary to press amendments Nos. 43 and 44 separately. However, if he does press the amendments, we will support him in any vote that is held.
	Amendments Nos. 4 and 35 deal with clause 92. The clause limits the effect of section 24(3) of the Housing Act 1985 so that it applies only to Wales, but clause 92(2) allows the Welsh Assembly to abolish it for Wales also. I assume that that is a gesture to the principle of devolution. However, the Government say that the proposal is about enabling authorities to comply with the Government's rent restructuring policies in England. The amendments have been tabled to give the Minister an opportunity to explain the policies in a little more detail, and to explain why clause 92 is needed.
	My understanding of section 24(3) of the 1985 Act is not that uniform rentalsor fixed percentages for public-sector rents by comparison with private-sector rentshave to apply across the country, but that there should be an equivalence of proportionality, in a local authority area, between public sector and private sector rents across different types of dwelling. That is surely sensible. Wages in the labour market in an area are linked to local market conditions, and local private sector housing market rents are also a function of the local market conditions. My intuition is that it is appropriate to have a consistent relationship between public sector and private sector rents in an area. I readily accept that that relationship might have to be very different in areas of high demand and high prices from what it should be in areas of low demand and low prices.
	In the constituency of my right hon. Friend the Member for Haltemprice and Howden (David Davis), for example, registered social landlord rents are notorious for being higher than market rents. In many other areasand my own constituency is one of themRSL rents obviously have to be substantially lower than comparable private sector rents if the affordable housing market is to function. However, it is not clear why the Government need to use clause 92 to remove section 24(3) of the Housing Act 1985 in relation to England, and to give the Welsh Assembly the power to remove that section in respect of Wales.
	Amendment No. 36 is a consequential amendment that does not need to be discussed.
	The combined effect of the sequestration of capital receipts under clause 11, the power of the Secretary of State to distribute them as largesse to favoured authorities, changes in the local authority social housing grant, the arrangements for discretionary repayment by central Government of overhanging debt, and the Government's meddling with the formula funding grant, as well as the general thrust of their policy in respect of local authority financingall those factors undermine the autonomy of debt-free authorities and give the lie to the Government's claim that the Bill is about freedoms and flexibilities. It is about increasing central Government control and the patronage power of the Secretary of State. It is about penalising the prudent to bail out the profligate. It is about disempowering local communities and undermining true financial accountability. It is about politically motivated hostility towards the freedom that right to buy gives ordinary working families. It is about transferring receipts from local authorities and the south-eastwhere most right-to-buy receipts arise and where affordable housing is desperately needed.
	Clause 11 is bad. The Select Committee that considered the draft Bill recommended that is should be scrapped but the Government refused. New clause 3 makes a bad clause less bad and I commend it to the House.

Edward Davey: I agreed with much of what was said by the Member for Runnymede and Weybridge (Mr. Hammond), so I will speak for fewer than the 45 minutes taken by him. As we support and can unite behind new clause 3which addresses some of the problems created by new clause 11 and the pooling of capital receiptsand one or two other amendments tabled by Conservative Members, we shall not press our amendments to a vote.
	The Government shifted their position on pooling significantly in Committee and in respect of the local authority social housing granttoday, they have changed position again. One might say that that shows flexibility on their part but to those of us who have witnessed the charade, the Government's incompetence is exceptionally worrying. It is a shame that the hon. Member for Harrow, East (Mr. McNulty) is not in his place, because it is increasingly clear that he is not getting a grip on issues that are his responsibility. Debt-free authoritieshaving worked within a particular framework for many years and managed their assets properlyare now being penalised. Under pressure from arguments in Committee, the Government have brought forward a transitional arrangement package. It does not go nearly far enough, but it shows that the Government know they got it wrong.
	Equally, the sustainable communities plan contained the mistake of proposing that local authority social housing grant should be abolished from April. The Government realised the damaging effect that that would have on many housing authoritiesincluding those of the right hon. Member for North-West Hampshire (Sir G. Young) and my hon. Friend the Member for Ludlow (Mr. Green).

Matthew Green: Shropshire district council has a 4 million social housing programme for next year, using the last of its capital, which it must try to rush through in three months, including planning permission. If too many councils throughout the country do the same, it will still be at the discretion of the region to decide whether they may proceed or to prioritise something else. If that happens, it will be a scandal.

Edward Davey: I am grateful to my hon. Friend. The Government say that they are thinking about long-term strategies for sustainable communities, but they present policies that fall apart under initial scrutiny. A few weeks after announcing them, the Government try to patch up their collapsing framework. I hope that the Minister can assure the House that his Department's continual mistakes are not repeated.
	New clause 3 seems to address the problems of clause 11 and is offered to the Government as a compromise. In Committee, my hon. Friend the Member for Guildford (Sue Doughty) made a powerful speech outlining that the likely effect of the proposals on her debt-free authority and others would be to prevent them from dealing with the key issuerecognised by the Government in their sustainable communities statementof a shortage of affordable housing. New clause 3(2)(b) will ensure that grants repaid to authorities could be used to secure social housing. We explored that issue in great detail in Committee and the Government admitted that that was the case. New clause 3 enables the Government to put into practice their intention, so loyal Labour Members should support it.
	New clause 6 is a bit of a curate's egg. I can support the second part but subsection (1) is bizarre, in that it goes against what was said by Conservative Members on the Select Committee that examined the problem of empty homes when that matter was the responsibility of the then Department for the Environment, Transport and the Regionsand reported on the need to improve the quality of information. We are passionate about that issue because there are more empty homes in every region of this country than there are homeless people in every region of this country. If that huge resource were used properly, the homeless problem could be tackled quickly, cheaply and in a sustainable way.
	The Select Committee said that there was a need to improve the accuracy of data on empty homes, particularly in housing investment programme returns, and to use geographical information systems to enhance the quality of informationsomething on which the Government are now moving. The Committee reported also a problem about the way in which council tax data could be used. The Information Commissioner took one view and Poole borough council obtained counsel's opinion that council tax data could be used for the purpose. The Committee sought clarification and called on the Government to end the confusion and bring forward legislation.
	The Government have done so in the form of the Bill, but I wonder where the hon. Members for Mole Valley (Sir P. Beresford), for Epsom and Ewell (Chris Grayling), for Vale of York (Miss McIntosh) and for Leominster (Mr. Wiggin) are to be found, because they agreed to the Select Committee's report, in direct conflict with new clause 3. I hope that Conservative Front-Bench Members will sort out their position.
	The Conservatives may say that new clause 6 is tightly drawn because it relates the use of such data only to the notion of compulsory leasing, a proposal that was aired in the sustainable communities plan, which we shall have to debate on another occasion. We support the Government on those proposals, provided that there are appropriate safeguards, such as those for compulsory purchase.

Philip Hammond: What safeguards would the hon. Gentleman propose?

Edward Davey: It would be completely wrong for there to be no safeguards and I shall give the hon. Gentleman an example. Recently, I discussed with Jonathan Ellis, the chief executive of the Empty Homes Agency, the profile of people who leave their properties empty. The picture is mixed. Some of those people are extremely wealthy; they have a huge property portfolio and have never quite got round to dealing with it. They are absentee landlords and they simply do not bother. Others, however, are elderly and do not have enough money to maintain their property. They may be asset rich but they are income poor. They do not want the hassle of getting involved with bureaucracy. Other elderly people may be sick; they may suffer from dementia and have gone into a care home so they did not get round to putting their property to rights and letting it.
	Such cases must be managed appropriately and the legislation must ensure that no local authority could treat such owners insensitively.

Nick Raynsford: indicated assent.

Edward Davey: I am glad that the Minister agrees.
	Such provisions should not, however, prevent us from adopting a public policy whereby empty properties are used to tackle homelessness. The Conservatives should agree. They may point out, rightly, that many empty properties are in the state sector, but that is true of only 10 per cent. of empty homes in London and the south-east. Of course, even that is too much and the problem needs to be tackled. We need to hold the Government and local authorities to account for that.
	In my constituency, however, 90 per cent. of empty homes are in the private sector. Yes, local authorities could do a better job by using voluntary agreements. They could promote best practice and provide grants to repair and renovate homes so that they could go back on the market. Local authorities could act in partnership with private letting companies to ensure that owners receive a rental income. However, there is a question that the hon. Member for Runnymede and Weybridge will have to face up to, because it is not covered in new clause 6. If best practice is adopted and there is an empty property strategy, if grants are offered and people are given support to use their assets, is there to be no backstop? If a person has a property that is desperately needed, should not the community take measures to put it back into useful possession? It would be difficult, even on libertarian grounds, to argue against that.

Philip Hammond: We already have a well established procedure for compulsory purchase of property where it is required for a public policy purpose. The Government are significantly extending the scope of such procedures. My view, however, is that compulsory purchase is a different order of imposition on the rights of private property than compulsory leasing. Compulsory leasing requires an individual to finance the capital cost of an asset, of which the Government then dictates the use. That seems quite different from compulsorily purchasing a property where it is required for a public policy purpose.

Edward Davey: I am grateful to the hon. Gentleman for giving me an early opportunity to put right the Conservatives' flawed economic logic. The point is that the property owner will keep the asset, so that must be less damaging than compulsory purchase. We have not yet seen the final proposals, so the hon. Gentleman may have a point, but the idea currently being debated by the Empty Homes Agency and others is that the rental income will be shared with the owner. Indeed, it will all go to the owner once the state's costs have been met; for example, the costs of repair, renovation and administration. The proposals could be extremely beneficial for property owners. This is potentially a win-win situation.

Philip Hammond: If it was in their interest, owners could do those things themselves.

Edward Davey: In many circumstances, people have neither the competence nor the capability to do that for a variety of reasons. I look forward to future debates with the hon. Gentleman when I can give him some concrete examples. I urge him to talk to the Empty Homes Agency, which has commissioned a MORI poll of the type of people whom we are discussing so that we have a true profile. That information will be important in getting the measure right.
	It is important to safeguard people's property rights, but it is wrong that there should be whole streets where properties are left emptythere is one such street in my constituency in an area of highly priced propertieswhen there are such huge homelessness and housing problems. [Interruption.] The hon. Member for Runnymede and Weybridge keeps saying Compulsory purchase. That is the illiberal position. The Liberal position is to go for compulsory leasing.

Philip Hammond: If the hon. Gentleman would accept that there must be an option for a person who is compulsorily required to lease to require the authority to purchase his property, he may overcome my objection. Would he support such a safeguard?

Edward Davey: That is a sensible proposal in principle and I hope that the Government will give it serious consideration. We might need a different regime to ensure that the system was slightly quicker than some of the compulsory purchase procedures, but the House should debate such matters to ensure that we get the legislation right. I hope that Conservative Members will at least agree that it is vital to use such resources, especially where there is high demand for housing and we need to tackle homelessness.
	New clauses 7 and 16 require reports on housing revenue accounts and overhanging debt. We have no problem with that and I shall not rehearse the detailed and technical arguments with which we dealt in huge detail in Committee. We have some concerns about the way that the Government are going about housing revenue account reforms. As some of the money could go to the Secretary of State and would not be ploughed back into housing in local authorities, it is important to monitor the Government's policy. New clause 7 would do that, so we support it.
	There were fierce debates in Committee about the Government's overhanging debt proposals. Following the views of the Select Committee and of the Chartered Institute of Public Finance and Accountancy, I argued that, in effect, the Government were giving local authority tenants an extra incentive to opt for a housing transfer. There was some discussion of how the analysis was to be carried out and the Minister has written to me about that issue. However, I am still not convinced that an extra bribe is not being proposed. The Liberal Democrats are not against stock transfer. In many cases, it is appropriate and we have argued for it, but the key public policy issue is that stock transfer decisions should be based on a level playing field for different types of landlord. We fear that the Government's proposals will skew the balance in favour of stock transfer simply because they have failed to win some stock transfers.
	The Government's analysis is wrong. Where stock transfers were lost, it was not because there was no bribe, but because the actual proposal did not make sense and tenants were right to vote against it. Where the proposals are put to tenants in a way that makes sense to them, they vote for them. I suggest that new clause 16 is right and that the clauses on housing issues are wrong.
	I said that I would touch on the local authority social housing grant because it is crucial to these issues. I want to reiterate the shock and anger in many communities. People have been labouring awaywhether in public sector housing authorities, registered social landlords or other stakeholdersto try to put together proposals, often with private developers, to build affordable housing on the back of the promise that local authority social housing grant will be part of the financial package. Suddenly, the Deputy Prime Minister told the House in the middle of February that those people could not have the grant on which all their work had been done and on the basis of which their money had been invested. That was an absolute catastrophe.
	We are not over-emphasising the problem: affordable homes will not be built, and we are experiencing one of the biggest crises in respect of the shortage of affordable homes probably in the past 100 years. So not enabling proposals that are already halfway down the pipeline to go through seems not only wrong, but to go completely against the thrust of the Government's policy.

Matthew Green: Is not the reality that the Government are effectively saying that they are not interested in those affordable homes because they are not in their priority areas? The reality is that South Shropshire will need 1,400 affordable homes by 2011. With the abolition of that scheme, one of the main ways of delivering that will have gone, and the regional body will say that places around Birmingham, or somewhere like it, have priority and people in South Shropshire should not have any social housing funds. Rural areas have very real needs, and the fear is that they will not receive the funding that they used to get because they are not one of the Government's priorities.

Edward Davey: My hon. Friend makes an excellent point. The problem is that the Government are trying to centralise housing policy over the regions and pick certain areas, and they do not like some areas. They are taking money from all debt-free authorities of whatever political persuasion, and they are taking the local authority social housing grant away from them, too. The Government are trying to control the nation's housing policy from Whitehall, and that cannot be right.
	We are findingthis affects my hon. Friend's part of the countrythat the Government sometimes put ceilings on the number of affordable houses that can be built. The councils and communities in those areas would be prepared to see more houses built, but that is being stopped by central Government. That seems to be nonsense.
	I hope that the Government will not leave this issue, especially the local authority social housing grant, at the statement that we received today from the Minister. Frankly, so far as we can tell from the statement, the available grant will be cut by 225 million next year, so fewer affordable homes will be built. That is why I refer the Minister to early-day motion 824, which my hon. Friends and I tabled last night. We did not realise that we would have such an effecta written ministerial statement being produced the very next day. Obviously, we have more influence than even we had imagined. Unfortunately, the ministerial statement does not go as far as our early-day motion, so I hope that the Minister will look at it again.
	My final remarks relate to new clause 6, on empty homes, the first part of which I have been very critical. I shall end on a more consensual note by telling the hon. Member for Runnymede and Weybridge that the second part of new clause 6 is very laudable, and he will know that not only do we support it, but the Local Government Association supports it. The hon. Gentleman would like local authorities to be able to keep the council tax receipts where they decide to get rid of discounts on empty homes. That seems very sensibleit has been Liberal Democrat policy for many years.
	The Government might say, Well, we've gone some way. We have given councils the power to end the discounts on empty homes. Isn't that a good thing? Well, I am afraid that that is only half the cake. Allowing local authorities to keep the revenue that they thereby raise would enable them to get a much greater hold on the housing issues in their areas. However, siphoning off that revenue not only gives poor incentives to local authorities, but prevents that policy from having an even more powerful effect on the housing situation. If the Minister does not like the first half of new clause 6, I hope that he will see some merit in the second half.
	 I have spoken for longer than I had intended, so I shall simply end my speech by saying that new clause 3 would make a major improvement to the Bill and it therefore deserves the support of not only Conservative Members and the Liberal Democrats, but other hon. Members on both sides of the House.

Nick Raynsford: We have had a long debate, with two speechesone lasting about 45 minutes, the other 25 minutes. It would be nice to think that I could get through this quickly because my analysis of the two contributions is that they were both erroneous, but the hon. Member for Kingston and Surbiton (Mr. Davey) was slightly less wrong than the hon. Member for Runnymede and Weybridge (Mr. Hammond). If one speech was only half the length of the other, there is clearly some merit in keeping comments short.
	Let me try to focus on the various issues. This is a complex range of housing matters. New clause 3 mirrors a number of amendments tabled by the Opposition in Committee. Like them, it would remove significant resourcessome 600 millionfrom the funds that will be allocated to all authorities on the basis of their housing needs. The amendments tabled by the Liberal Democrats would either remove the power to make regulations requiring housing capital receipts to be pooled, or limit the pooling rate to 50 per cent. In other words, they are not quite as wrong the Conservatives, but their proposal is still unsatisfactory because it would reduce the amount available for distribution to authorities in need.
	We have always taken the viewinterestingly, so did the previous Government when the right hon. Member for North-West Hampshire (Sir George Young) was the relevant Ministerthat it is right that a proportion of the proceeds from the sale of council housing through the right to buy should be recycled, so that it can be used in areas of greatest need. That is a fundamental principle of housing capital finance, but the amendments tabled by today's Conservative party would overturn that principle. If the amendments were passed, the very authorities that we want to help would be penalisedthose with high housing need, but low capital receipts.
	I believe strongly that all authorities should have access to the funding that they need to meet national housing priorities, such as affordable housing and decent homes, and pooling three quarters of housing receipts is an element in the process by which we can achieve that; removing 600 million from the national mechanism is not.
	The hon. Member for Runnymede and Weybridge claimed that this was a centralising measure, interfering with local authority freedom. On the contrary, it simply applies the same principles that were the fundamental element of the previous Government's policy, but it does so consistently to every authority, rather than allowing a different logic to apply uniquely and paradoxically to debt-free authorities.
	The proof of the pudding has to be in the total sums available. I put it to the hon. Gentleman that, far from reducing local authority freedom, the Government are in the business of increasing investment and allowing local authorities to do a great deal more. In 199798, we inherited 900 million capital investment in housing; in 200203, we are investing 2.5 billion in housingabout two and half times more. That is possible partly because we make proper use of the available receipts, which otherwise would not be applied.

Matthew Green: The Minister will accept that there may be years when the amount that the Government put into housing, or the amount collected back from capital receipts, is not enough to meet all the housing need throughout the country. The Bill is a centralising measure because somebody in the centre, at regional or national level, will decide what the priorities are for giving out what grant there is. I accept that there may be much more money going into housing, but if it does not meet total need, someone will still be making decisions on prioritiesand that someone will not be the local council.

Nick Raynsford: Housing is a national issue, and it is absurd to suggest that it should be left entirely to individual local councils to decide whether there should be policies to meet housing need in their areas. In Committee, I cited an example of the Liberal Democrats making a great fuss about the failure of a Conservative council in Surrey to use its money for housing investmentyet they still attack the Government's proposals to ensure that money is used for housing. I have to say here on the Floor of the House, as I said in Committee, that it is typical of the Liberal Democrats to look both ways. First they say that they want money invested in housing, because housing is a priority, but when the Government do something to achieve that, they complain that we are centralising.

Edward Davey: rose

Nick Raynsford: On that note, I give way to the hon. Gentleman.

Edward Davey: I am surprised that the Minister has brought that example up again, because we soundly defeated him in argument when he brought it up in Committee. My colleagues in Surrey, who were arguing against the Conservatives running the council, were speaking to the local people, because they wanted them to exercise their democratic choice at the next council elections to get rid of the Conservative administration that was mishandling the resources available to it. That is called local democracy. If the Government are to push a model in which everybody, on every issue throughout the country, should always look towards Westminster and Whitehall for a solution, they are advancing a centralised model that Stalin would have been proud of.

Nick Raynsford: As usual, the hon. Gentleman does his case no good by overstating it. The Bill is designed to ensure that there is a larger pot of money available to enable local authorities to respond to housing need in their areas. By no stretch of the imagination can it be compared to the behaviour of the former Russian dictator whose death 50 years ago is the cause of a certain amount of newspaper comment at the moment. On reflection, the hon. Gentleman will realise that that is not a very appropriate parallel.
	As hon. Members will know, because we made the announcement in Committee, we have put in place generous transitional arrangements to assist debt-free authoritiesa move that was largely welcomed in Committee, albeit slightly grudgingly by some Members.
	New clause 3 is to some extent unworkable. For example, I assume that the reference to special grant means a special grant under section 88B of the Local Government Finance Act 1988, which, as hon. Members will know, requires an affirmative resolution of the House. If the receipt concerned were received at the end of the financial year, there simply would not be time to go through that procedure to comply with the time scale in the new clause. I therefore hope that new clause 3 will be withdrawn.

Philip Hammond: It ill behoves the Minister to talk about the time scale at the end of the financial year when he has just abolished local authority social housing grant with zero notice to local authorities. Moreover, if this is all about redistribution, why does the Bill not explicitly ring-fence the receipts in the hands of the Secretary of State so that they have to be redistributed as additional money, and cannot simply be lost in the big pot?

Nick Raynsford: The hon. Gentleman will remember that we debated that matter in Committee, and I gave clear assurances that the money would be used for housing. Those assurances are on the record, and I am happy to repeat them today. It is not necessary to make additional amendments to legislation.
	New clause 6 is an odd combination of two rather different proposals, as the hon. Member for Kingston and Surbiton pointed out. First, it seeks to limit what a local authority can do with council tax information concerning empty homes. The second, unrelated provision seeks to ensure that the extra money raised from removing or reducing the discount on long-term empty homes is kept by the billing authority.
	I am surprised by the official Opposition's apparent commitment to supporting the freedom of the owner of an empty property to enjoy keeping the property empty. Most people on both sides of the House recognise that there is a problem with empty property, and that we need to take more effective action to bring it into use.
	The hon. Member for Kingston and Surbiton made several valid points about the work of the Empty Homes Agency, and about action to incentivise the owners of empty properties to bring those properties into use. However, he went on to say that some owners were inexperienced or nervous about letting their properties, and some may be keeping properties empty out of inertia. It is therefore entirely right and proper, as the Select Committee has said, for there to be mechanisms to identify people in that position, to ensure that local authority empty property agencies, where they existand many local authorities run empty property unitscan advise people about what can be done to bring properties into use, perhaps by putting them in touch with a local housing association that may be able to help with letting.
	The provisions in the Bill are simply about using information already held by local authorities to get empty homes back into use. That is a wholly sensible and admirable proposal, which was supported by the Select Committee and has also had support from all parts of the House, so I am surprised that the Conservative party now appears to oppose it.
	I agree about the importance of safeguards for council tax information, but that information cannot be used to remove the freedoms of a property ownerto require them to take tenants or to sell to someone who would occupy the property, for example. The hon. Member for Runnymede and Weybridge mentioned the reference in the communities plan to propose measures to encourage empty properties to be brought into leasing. It says:
	We plan to do more to make better use of long-term empty properties in high demand areas. We will consult during the Spring on giving local authorities powers to lease long-term empty properties to improve them and bring them back into use.
	There will be full opportunity to discuss those provisions, which are not related to the Bill. The Bill is purely about information available to local authorities to enable action to be taken in line with the Select Committee's recommendation to bring the number of empty properties down. I would have thought that everyone would welcome that.

Philip Hammond: The Minister says that he will consult in the spring about powers for local authorities to lease properties compulsorily, but there is no provision in the Bill to give effect to that. On new clause 10, however, he said that he needed to put the power relating to something that he intended to consult on in the summer into the Bill now, because otherwise there might not be another opportunity to get that power on to the statute book for a couple of years.

Nick Raynsford: The hon. Gentleman may not be aware that my noble Friend Lord Rooker, the Minister for Housing and Planning, is preparing a piece of legislation that would provide a good opportunity for such provision. To the best of my knowledge, and I speak with some authority, there is no more local government legislation in the pipeline. As for retaining the extra money from removing or reducing the discount, we had a full debate in Committee on that question when we considered Opposition amendments to clause 75.
	As the Under-Secretary of State, my hon. Friend the Member for Shipley (Mr. Leslie), said at the time, we believe that there should be no financial benefit to a local authority from a decision on whether to charge full council tax on long-term empty homes. The decision should be taken entirely on housing grounds and not because of potential additional financial benefits to the authority, which could provide a perverse incentive. That would be particularly problematic in areas where there may be very low demand and genuine difficulties for people in letting property. In such cases, we believe that an authority should take decisions on the merits of the case without a potential distorting financial incentive.

Edward Davey: What I do not understand about that argument is that it seems to suggest that local authorities cannot be trusted to work out the housing needs in their area and the best policies to tackle them. Although the Minister talks about freedoms and flexibilities and says that this is a decentralising Bill, he is preventing local authorities from enjoying that revenue when they are taking sensible decisions.

Nick Raynsford: On the contrary, the policy gives local authorities the freedom to be able to reduce, and even eliminate entirely, the discount on long-term empty homes if they think that that is the right thing to do. We believe that local authorities should base their decision on a proper estimate of the impact of that withdrawal of subsidy and whether it would achieve the desired effect. That gives local authorities the freedom and the choice, and not a perverse incentive. As the hon. Gentleman will recognise, it would require the virtue of the Archangel Gabriel in some cases for local authorities to forgo potential revenue which, if it were available, they might be tempted to use in particular circumstances.

Geoffrey Clifton-Brown: The Minister's argument would hold some sway were it not totally inconsistent with his policy on abolishing the discount on second homes. What is the difference between the two aspects? The only difference is that abolishing the discount on second homes could raise 60 million, whereas abolishing the discount on empty homes could raise 160 million. Is it the case that the Government simply do not trust local authorities to use that money?

Nick Raynsford: No, that is not the case. As the hon. Gentleman knows, there is a fundamental difference, because, in areas with substantial numbers of second homes, real concern exists that many local people on modest incomes are priced out of the market. In some tourist areas, such as the west country or the Lake district, where there is a shortage of affordable housing, house prices get pushed up by the presence of many second home owners. That has serious consequences for local people in need.
	It is an explicit provision of our arrangement to ensure that local authorities can use the revenue that they get from removing or reducing the discountwe must have the 10 per cent. discount to ensure that those properties can be identified as second homesto meet local needs. The Liberal Democrats pressed us to insist that that money should be used for housing, but we said that it is better to give local authorities the freedom to decide what they should use it for. I therefore remind the hon. Member for Kingston and Surbiton that his is not the only party that supports giving freedom to local authorities and trusts them to take the decision.

Geoffrey Clifton-Brown: Will the Minister at least concede that, if councils abolish some or all the discount on empty homes, they should be reimbursed for the costs of levying that council tax? Otherwise, there will be a perverse incentive not to reduce the discount on empty homes at all.

Nick Raynsford: No. The position is that a property that is a second home has qualified for the 50 per cent. discount. Under the new arrangement, the authority will be free to decide whether to reduce that discount to anything between 50 per cent. and 10 per cent. It will have discretion as to the level of reduction. Any revenue received from that decision will accrue to that authority and to other precepting authorities when there is a county as well as a district. A fair distribution will therefore exist between different tiers of government. That is a quite separate issue from a purely housing policy-based decision as to whether it is appropriate to give an incentive to someone to bring an empty property back into use by charging the full council tax.

Edward Davey: Can the Minister confirm that the final decision on this matter will come when we see the regulations? Will he therefore assure the House that he will keep this aspect under review and possibly ensure that regulations will allow some variations, so that we can see whether he is right or we are right?

Nick Raynsford: I can happily give the hon. Gentleman the assurance that the policy will be kept under review. Obviously, we keep all policies under review. Our firm view, however, is that the right way forward is that which I have set out, and that is the way in which we intend to proceed.
	The requirement in new clause 7 for annual reports on the operation of clause 90 and its effects on local authority rents would achieve no substantive benefit but it would impose an unnecessary administrative burden. Housing revenue account subsidy has operated as a redistributive system for more than a decade. Like other things, it dates back to the previous Government, as it was introduced by the Local Government and Housing Act 1989. It therefore seems doubly bizarre that the Conservatives are now changing the position that they adopted when in government. Redistribution has been achieved up to now by offsetting assumed housing revenue account surpluses against rent rebates. That depended, however, on housing benefit being included in the HRA, which was highly controversial and deeply unpopular with many tenants.
	In response, we took a decision to remove housing benefit from the housing revenue account, but after rent rebates are removed from the HRA, the old redistribution system will not be possible, so the new, more transparent mechanism in clause 90 is needed. For the vast majority of authorities, the clause will simply replicate the outcome of the current redistribution mechanism. The only authorities whose resources will be affected are the 18 English housing authorities that currently have an assumed HRA surplus greater than their expenditure on rent rebates.
	I have mentioned the figure of 18, so I now owe an apology to the hon. Member for Runnymede and Weybridge. He suggested that there were 34 debt-free authorities, but I intervened to suggest that the figure might be 18. I apologiseI was incorrect, because I was thinking of the other group. In fact, the number of debt-free authorities with housing stock is 35. I hope that that puts the record straight.
	The authorities that have an assumed HRA surplus greater than their expenditure on rent rebates are currently required to transfer the excess to their general funds, thereby effecting a transfer from council tenants to general council tax payers. In future, subject to transitional arrangements, these amounts will be pooled, thus stopping the current subsidy of council tax by council tenants. That subsidy has caused considerable anger to council tenants.
	Assumed HRA surpluses and deficits for the purposes of clause 90 are calculated on the basis of assumptions about an authority's rent levels and expenditure on its stock. Contrary to the views expressed by Conservative Members, there is no link between an assumed HRA surplus and good performance or political make-up. Local authorities that had the good fortune of low investment needs and, therefore, little debt while being able to command high rents have tended to end up in assumed surplus. Likewise, deficits generally occur when investment needs and, therefore, debt levels, are higher than can be funded from reasonable rents however efficient the council is and however well it manages its affairs.
	The proportion of authorities rated excellent and good by the Audit Commission under the comprehensive performance assessment is about 50 per cent. for all three main political parties. Similarly, comparable proportions of both deficit and surplus authorities equally achieve good or excellent ratings. I stress that list in case the Opposition parties are tempted to indulge in any mischief making on this point. In addition, there will be no adverse impact on council rent payers. Clause 90 will not make any difference to council rents for any authority, as we have now put in place a national framework for affordable social rents based upon the size, location and condition of properties.
	The new clause is not necessary because totals of HRA surpluses collected and HRA subsidy paid to authorities in deficit will be approved by Parliament as part of our request for resources. The figures will also be recorded in the annual accounts of the Office of the Deputy Prime Minister and be open to scrutiny by both Parliament and the National Audit Office. Additionally, the start of consultation on the annual general determination of HRA subsidy has always been announced in the House and the papers made available. Copies of the final determination of HRA subsidy are also made available to the House. That will continue. There is therefore no need for the further report suggested by the new clause.

Andrew Turner: The Minister suggested that the provision would have no effect on rent levels. However, will he confirm that the framework that he is proposing involves guidance, will not be mandatory on local authorities and that an authority, such as Sunderland, that has a large HRA surplus could use the surplus to subsidise rents? Or will the framework be more mandatory and will authorities such as Sunderland not be allowed to retain the surplus to subsidise rents?

Nick Raynsford: The hon. Gentleman is getting a little confused. The purpose of the rent restructuring framework is to ensure broad consistency across the country that will take account of the size and attraction of particular properties. It will also take account of the local housing market in different areas. The aim is to do that over time, because we cannot make sharp adjustments to issues that impact on the viability of housing organisations and people's budgets. The programme is being phased in over 10 years, and it is designed to ensure that there is a more coherent framework of rents across the country.
	New clause 16 relates to the Government's policy of ensuring that all social housing is decent by 2010, and in particular the contribution that the transfer of local authority housing to registered social landlords makes towards that. The policy was set out in the housing statement, The Way Forward for Housing published in December 2000 and reaffirmed last month in the plan for building sustainable communities that was announced by my right hon. Friend the Deputy Prime Minister. The new clause would require the Secretary of State to report to Parliament annually on two matters. The first would be the amount of any payments made, or likely to be made, under clauses 40 and 41. Those payments are in respect of overhanging debt that may arise when an authority transfers its housing to a registered social landlord. The second would be the effect of such payments on the rents of those properties that are being transferred.
	Clauses 40 and 41 allow the Secretary of State to assist one or more English local housing authorities to meet debt liabilities through a direct payment either to the public works loans commissioners or to the local authority on the condition that it is transferred to a non-PWLC lender. They confer similar powers on the National Assembly for Wales in relation to the debts of Welsh authorities. The policy driver for clauses 40 and 41 is assisting individual authorities that transfer their housing stock to a registered social landlord and need assistance to meet outstanding housing debt liabilities when the receipt is insufficient to cover them.
	The amendments appear to suggest that something is not being disclosed in relation to those paymentsor perhaps there is a belief that we are giving favourable treatment to authorities that transfer their housing stock and for which we make an overhanging debt payment. Neither is the case. All authorities are treated on a fair basis. It is for a local authority to choose whether it wishes to retain or transfer its stock based on a rigorous option appraisal involving tenants and other stakeholders.
	If an authority or its tenants choose to retain their stock, the Government, through the housing revenue account subsidy, continue to ensure that a local authority can meet the cost of servicing its housing attributable debt. In other words, HRA subsidy continues. However, when a local authority transfers all its housing stock, it is inappropriate and, frankly, stupid for it to remain in receipt of ongoing housing revenue account subsidy. That is nonsensical. In such cases, we make an overhanging debt payment. Different authorities are not treated differently. Those that keep their stock continue to get subsidy; those that have no stock no longer get subsidy and the overhanging debt is written off. We do not select the authorities; that is the result of local choice that is possible because the Government have made a commitment to make housing transfer and a decent home available to all tenants.
	When the payment is made, it is common practice for the Office of the Deputy Prime Minister to include reference to both the payment and its amount in the press notice accompanying the housing transfer. Once a transfer takes place, details of it, including the number of dwellings, the sale price, private finance and overhanging debt payment, are also included on the website and are freely available from the ODPM. Overhanging debt payments were originally recorded in the Treasury's annual accounts, but from 200203 they will be recorded in the annual accounts of the ODPM and reported to Parliament through that route. So payments are open to the scrutiny of Parliament and the National Audit Office.
	New clause 16 would also require that the effect of an overhanging debt payment on the rents of the transferred stock should be reported. That again misses the point of the Government's rent restructuring policy, which was introduced after much consultation, and the justifications for it have been set out many times. In consenting to all housing transfers, it is a condition that the new landlord will have determined rents in line with rent restructuring policy and methodology and will meet the 2012 target. How that is delivered will have been part of the development of the transfer proposal on which tenants will have voted. Whether or not there is to be an overhanging debt payment will not have an impact on that process.
	Whether the transfer is of all, or only part, of an authority's housing stock, the delivery of restructured rents by 2012 across all social housing remains the priority. So where there is a partial transfer with overhanging debt, it is our intention that there should be no impact from the transfer on the rents of those tenants who remain with the authority. Therefore, a report to Parliament on the impact of the overhanging debt payments on rents would be nugatory because in all cases there would be nothing to report. I hope that the hon. Member for Runnymede and Weybridge will not press the new clause to a Division.
	Amendments Nos. 4, 35 and 36 relate to the Government's policy of encouraging authorities to restructure rents, as I have set out. The Government inherited a social rents policy that was a total shambles. In some areas, rents charged by neighbouring councils for similar properties varied by huge amounts and housing associations often charged more than half as much again for similar properties in the same area. In time, our rent restructuring policy will produce a coherent pattern of rents for social housing across England. By contrast, the Opposition's policy would make the situation even more chaotic.
	If social rents were allowed to approach market levels, some housing providers in areas of low demand would be unable to operate, while in areas of high demand such as London, those on modest incomes would be priced out of the market altogether. Amendments Nos. 4, 35, and 36 would delete clause 92, which seeks to remove an obstacle to the policy of rent reform. The amendments would undermine that rent reform and restructuring policy and are therefore undesirable.
	The hon. Member for Runnymede and Weybridge asked whether a local authority could look at the relationship between public and private rents in its area. The relevant legislation does not explicitly refer to an authority having regard only to its own area, so local authorities can look at a much wider area. However, we believe that that is undesirable because it inhibits the scope of rent restructuring policy, which is why we are introducing change. As for the position in Wales, he rightly identified the fact that we wish to give the National Assembly for Wales scope to reach a decision on its own merits within the Principality.
	The hon. Gentleman also raised the issue of nomination rights. I apologise for the fact that he has not received a letter. I tried to ensure that all the commitments were followed up, so I shall certainly pursue that. However, I took up the issue because there was a potential anomaly and conflict with existing policy, as nomination rights are not taken into account when calculating the level of receipt. My noble Friend Lord Rooker has since agreed that, when an authority's contribution to pooling is calculated, any consideration or reduction of the receipt in respect of nomination rights will be excluded. However, I shall write to the hon. Gentleman and put that on the record.

Philip Hammond: Will the Minister answer my question about a possible clawback for English Partnerships and the way in which that relates to clause 11?

Nick Raynsford: I will write to the hon. Gentleman on that issue. I urge him and the hon. Member for Kingston and Surbiton not to press their amendments to a vote.

Philip Hammond: As usual, I greatly enjoyed the Minister's reply to the points that he thought that I was going to make. In many cases, however, he did not address the points that I did make. The key provision in this group of amendments is new clause 3, which deals with issues raised by clause 11. Clause 11 is a centralising measureit gives the lie to the Government's claim that the Bill delivers freedom and flexibilities to local authorities and it is the antithesis of good accountable local government. New clause 3 is a sensible compromise and has the support of both Conservative and Liberal Democrat Members. The Government have rejected it because they are bent on the redistribution of assets of prudent, debt-free local authorities. I urge my hon. Friends to support new clause 3.

Question put, That the clause be read a Second time:
	The House divided: Ayes 183, Noes 312.

Question accordingly negatived.

New Clause 8
	  
	Council Tax and Regional Bodies

'.Nothing in Part 6 of this Act (sections 74-86) may be used in conjunction with the use of council tax to raise tax for any regional body.'.[Mr. Clifton-Brown.]
	Brought up, and read the First time.

Geoffrey Clifton-Brown: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss amendment No. 3, in page 71, line 11 [Clause 120], after 'authority (', insert 'but not'.

Geoffrey Clifton-Brown: The purpose of the new clause is to probe the Government's intention for funding the various regional bodies that they are introducing. The Under-Secretary has already funded the shadow regional assembliesthe so-called regional chambersout of central Government funds. If he can tell me that no provision in part 6 seeks to fund any regional bodies, I shall withdraw the new clause now. Unless he can give me that assurance, I shall continue to press the matter. Will the Under-Secretary give way?

Christopher Leslie: I shall intervene. Part 6 has no tax-raising mechanisms save for revenues from forgone discounts or changes to valuation bands at some point in the future. There are no direct mechanisms whereby regional bodies could gain. However, part 6 affects revenue and such mechanisms cannot therefore be ruled out for the future.

Geoffrey Clifton-Brown: Such mechanisms cannot be ruled out for the future. We must therefore assume that the Government have a gleam in their eye and council tax will be used in future as a mechanism for funding various regional bodies. We already know from the Planning and Compulsory Purchase Bill that eight shadow assemblies or chambers will be set up by the late spring. All eight regions will have those so-called indirectly elected bodies. They are likely to constitute the regional planning body, which will have substantial powers to draw up regional spatial strategy. It presumably needs substantial funding to operate them. We will have regionalisation to that extent, whether we like it or not.
	We know from the Deputy Prime Minister's community statement that a regional housing body will be established to draw up a regional housing strategy. Another stratum of regional bodies will therefore require funding. Furthermore, the Regional Assemblies (Preparations) Bill, which is in another place, will provide for the possibility not only, God forbid, of regional referendums, but of directly elected regional assemblies, if people vote for them. Those regional bodies will require considerable funds, and that is what the new clause probes. It would be interesting if the Minister could indicate the sums that the Government are already providing to fund these shadow regional assemblies, chamberscall them what you willin the north-east, for example, where the concept is most advanced.
	Amendment No. 3 would reverse the thrust of clause 120 so that, although the Secretary of State will be able to provide powers to designate different local authorities for different purposes, he will not be able to do it purely on a regional basis. It seems grossly unfair that a whole class of local authority should be singled out on a regional basis for different treatment in relation to council tax.
	Will the Minister clarify the stage that funding for the regional bodies has reached, the size of the budget that is set aside for the next year or two, and whether it is intended that there should be a regional council tax or any separate precept to pay for them?

Matthew Green: We support the new clause, although for an entirely different reasonnamely, that council tax should be scrapped. It is a completely inappropriate means of raising revenue for councils or for regional bodies. When the regional bodies finally emerge from the weak state that the Government propose into the fully-fledged system of regional government that we hope for, they will need tax-varying powers. Scotland has the ability to raise extra tax or, indeed, to lower it; Wales does not, but should have. One of the oddities involved is that it may turn out that all the English regions, Scotland and London have the power to raise money in one way or anotheralthough the London system is inappropriatewhile Wales is left as the only part of the country that cannot. The Government may find themselves in difficulties with their Welsh MPs in that regard.
	Overall, council tax is an iniquitous, inappropriate and non-progressive form of taxation that should be abolished and replaced with levels of local income tax. I am sure that that system will increasingly develop in the future.

Geoffrey Clifton-Brown: I seek clarification of the Liberal Democrats' policy. Are they saying that they would have a local income tax to raise money for local authorities as well as a regional income tax to raise money for the regions? Have they undertaken any proper costings as to how much those two taxes would put on the average taxpayer's bill?

Matthew Green: The money would only replace money that is currently raised by council tax, so overall it would not add any extra burden of taxation. Such a tax would be based on ability to pay rather than on a fixed asset. Council tax is a particular burden on pensioners, for example, who are on fixed low incomes but have to pay more each year. Council tax has no buoyancy. It has to be raised every year, unlike income tax; with the latter, if the economy goes up there is a general shift up in revenues. Council tax is completely non-progressive. We have proposed that in the forthcoming Budget the Chancellor could introduce a 50p band for income tax across the country and use that to knock 100 off every council tax bill.

Madam Deputy Speaker: Order. I hope that the hon. Gentleman will continue his remarks in relation to the amendment.

Matthew Green: Thank you for bringing me back on course, Madam Deputy Speaker. I was getting rather too enthused about our alternative Budget. However, the reality is that the money that would be raised through a local income tax, or through a regional form of income tax, would merely replace money that is currently raised through council tax.
	I should point out to the Conservatives that such a system works in America, where several different tiers of income tax are raised at state, county and national levels. Indeed, such a system is also used in parts of Europe. This is not rocket science, and my understanding is

Madam Deputy Speaker: Order. I am sure that the hon. Gentleman is about to draw his comments back to the new clause.

Matthew Green: I thank you for your guidance, Madam Deputy Speaker, but in a way they are directly related. In supporting the Conservatives, we are seeking to ensure that the council tax is not the mechanism used to fund regional bodies. I am explaining what should be used instead, so I hoped that, on that ground, it was in order to go down that route for a while.
	Our support for the Conservatives' new clause is based on an entirely different reason from theirs; it is clear that they would not want to establish the ability to raise, or to vary, taxation at a regional level. In our view, the council tax definitely should not be used as the vehicle to raise such funding; in fact, it should be scrapped at a local level as well.

Geoffrey Clifton-Brown: The hon. Gentleman is being very generous in giving way. Does he not accept that there will be an increase in the overall burden of taxation? His party strongly supports regional bodies, but we say that they are an unnecessary tier of bureaucracy. In any event, they are expensive and will have to be paid for. Does he accept that there will be an increase in the burden of taxation to pay for them?

Matthew Green: Regional bodies exist, and they are currently paid for out of central Government funds through the passing down of national taxation. We want such decisions to be taken at a regional level by democratically elected regional assemblies. The hon. Gentleman assumes that if a new tax exists, it has to be higher; however, it can be simply a replacement for another form of taxation, and that is what we want to see.
	In conclusion, we will support the Conservatives' new clause, and on amendment No. 3, we are in broad sympathy with their reasons for probing the Government. We are happy for central Government to make regulations applying to individual councils in order to vary matters, but we do not want them to take blanket decisions that apply to entire regions. For that reason, we are happy to support the Conservatives' amendment. Overall, and perhaps for entirely different reasonsparticularly in respect of new clause 8we lend them our support.

Robert Syms: I rise to support new clause 8. My hon. Friend the Member for Cotswold (Mr. Clifton-Brown) has been clever in tabling it to tease out the Government's position; indeed, the Minister's intervention was very interesting in that regard. In talking about regional government and its architecture, the Government, whenever they propose such a case, have always said that it should involve moving powers downward from central Government, rather than upwards from local government. If there is a case for financing regional government, I doubt whether the council tax should be used. I hope that the Minister will be a little more explicit on that issue in winding up the debate.
	The Government have been honest in the sense that, before we get to regional referendums, there will be a boundary review to examine the structure of local government, so that people know what form of local government they will have. Before we have such referendums, it would be equally fair of the Government to set out in explicit terms how the funding of these regional bodies will be covered. Regardless of the different opinions that exist on both sides of the House, once such bodies come into existence, there will come a point when they will need some form of independent finance. However, the Government have not said a lot about that. In setting up another tier of Government, costs are inevitable, even if one is trying to get rid of the county councils, as is the Government's will. We therefore need a little more clarity about what the Government hope to do in this regard.
	Council tax is appropriate for local government, although I will not stray into that argument, Madam Deputy Speaker. As the hon. Member for Ludlow (Matthew Green) has said, a number of models exist in other parts of the world such as the United States and Germany. Those models may be more appropriate for this kind of funding.
	This shortened debate is important. The Minister will understand that, on this side of the House, we are not great enthusiasts for regional government. We are concerned that the Government have a stealth policy towards local government: they keep pushing powers to the regions and employing more people there, but without there being any great demand for that, from my constituents anyway. The Government ought to be more explicit about the sort of deal that people will get. Financing will be critical in whether or not people will support regional bodies.

Christopher Leslie: I am glad that the hon. Member for Poole (Mr. Syms) found my earlier intervention interesting. Let me elaborate on it, because I am concerned about new clause 8 and amendment No. 3. Let us be clear about what the new clause will do. It would make it impossible for anything in part 6 of the Bill to allow the raising of revenue for any regional body. However, part 6 does not contain foundation revenue-generating instruments; it simply contains a number of measures that amend existing council tax provisions. The effects of new clause 8 would not be straightforward. For example, the new clause would mean that any revenues that were generated or changed because of alterations to the revaluation cycle would not be able to go towards regional bodies. However, other parts of council tax revenue would be able to go towards regional bodies, which is rather curious. Highlighting technical flaws in a new clause is sometimes a Minister's last refuge, but there are more substantive issues that I would like to raise.

Matthew Green: I am sure that the Minister is just about to raise those substantive issues, but this may be a good time for him to let us know what the Government's thinking is on the possible future need to raise money regionally. Without making any commitments, can he tell us what the likely mechanism will be, so that people can have some preparation time?

Christopher Leslie: The hon. Gentleman will recall from his late-night reading of the White Paper, Your Region, Your Choice: Revitalising the English Regions, that funding and decision-making powers will not be taken away from local government but from Whitehall. I commend the White Paper to all hon. Members; it will make that point clear, even to the hon. Member for Cotswold (Mr. Clifton-Brown). Funding and decision-making powers will be devolved to elected regional assemblies, should they be set up. Funding for programme expenditure would come from revenues that had already been determined and decided by central Government, rather than being raised wholly from local council tax payers. In that respect, hon. Members on the Conservative Benches have set a hare running in the wrong direction. I hope that what I have said usefully corrects their view.

Geoffrey Clifton-Brown: My hon. Friend the Member for Poole (Mr. Syms) raised an important point. If the Government are setting up a mechanism to discover whether people want referendums on elected regional assemblieswith all that that would involve in sorting out the different tiers of local governmentpeople are entitled to know what those regional assemblies are likely to cost, and whether council tax, or something else, is to be the mechanism for that. I hope that the Minister will be able to answer those points in the best possible spirit.

Christopher Leslie: We have not yet passed legislation to create regional assemblies. A Bill is going through the House that will enable referendums to be held on the establishment of elected regional assemblies. However, legislation on how those assemblies would operate and the programmes that they would undertake has yet to come.
	The White Paper suggests that a precept on council tax could be levied for the administrative running costs of elected regional assemblies, but not for the programmed expenditure. We anticipate that about 5p a week would be the typical levy on a band D council tax payer. That small amount would go towards the administrative running costs of an elected regional assembly. However, we should not rule out other possible precepting capabilities for a regional assembly. If local people choose in a referendum to have a regional assembly, and if they wish to see revenue generated for regional expenditure, who are we to stop them?

Geoffrey Clifton-Brown: The Minister has just said something very significant. On top of the new council tax band D bills of more than 1,000 that will be imposed, he has just said that he expects a regional council tax precept to be around 5p a week. Is he saying that 25 a year will be added to those huge increases[Interruption.] If my maths is right, 5p a week is 25 a year

Robert Syms: It is 2.50.

Geoffrey Clifton-Brown: I got the decimal point in the wrong place. Even so, the principle would be established that a precept could be put on the council tax to pay for the running costs of regional bodies. Could the Minister confirm that?

Christopher Leslie: Of course I can confirm that. It is in the White Paper and has therefore been in the public domain for some time. If the Conservative party has only just noticed that, I congratulate it. It would be only 2.50 a year, and I cannot see that as too onerous. We should also remember that there are already many precepting authorities for the council tax, many of which are regional bodies. That brings me to the point that the new clause could stop longstanding regional bodies operating. For example, regional flood defence committees levy a precept on local councils. Under the new clause, they would be bereft of funding, because they would no longer be able to precept local authorities to raise revenue. Other regional environmental, planning, arts and tourism bodies would be affected, even those on which Conservatives serve. I challenge the hon. Member for Cotswold (Mr. Clifton-Brown) to confirm that he intends that the new clause should deprive regional flood defence committees and coastal defence committees of the revenue that they need to stave off potential natural disasters that could affect many people. That expenditure is extremely important and those constituents who have been afflicted by floods and disasters would be most surprised at the import of the new clause.
	In any case, regional chambers already exist, many of them with Conservative members. For example, 41 Conservatives sit in regional chambers in the south-east and 30 in the south-west. Those chambers derive some of their revenue from local authorities, but the new clause would prevent that. It would mean that it was Conservative policy to put an end to those voluntary regional chambers, and would be a significant constraint on the freedom of local government to contribute to them.

Geoffrey Clifton-Brown: indicated assent.

Christopher Leslie: The hon. Gentleman is nodding and it seems to be his deliberate intention to restrict the ability of local authorities to contribute to voluntary regional chambers, even though they perform useful functions. We also hope that they will embark on the scrutiny process for regional development agencies, before elected regional assemblies are set up. That will be important work.

Andrew Selous: The Minister is being disingenuous if he thinks that just because Conservatives serve on regional bodies, we think that they are the most appropriate way to serve our constituents. Conservative representatives will serve on whatever bodies currently exist, but that is not to say that we think that they are the most appropriate.

Christopher Leslie: That may well be the case. Conservative members do serve in regional chambers, but I was seeking to establish whether that was official Conservative party policy. We know that the Conservatives are opposed to elected regional assemblies and that they would not give people the choice in a referendum to establish them. However, are Conservatives opposed even to the establishment by local authorities of voluntary regional chambers? The hon. Member for Cotswold was nodding about something before. Will he confirm that the Conservatives oppose regional chambers?

Geoffrey Clifton-Brown: I shall deal with that later.

Christopher Leslie: I look forward to that.
	I believe that new clause 8 would place a significant constraint on local government, but it is not untypical of the general policies pursued by the Conservative party when in government. In any case, part 6 of the Bill contains no specific provisions relating to precepting, apart from discounts on council tax banding. It is clear that the new clause would have a detrimental effect.

Geoffrey Clifton-Brown: The Minister challenges me to say whether the Opposition are in favour of funding the voluntary regional chambers, but it would be helpful if he estimated the costs being incurred by those bodiesin the north-east, for exampleand said where the funding comes from. Is any council tax precept being levied to fund those bodies at present?

Christopher Leslie: There is no precept as such, but local authorities are free to contribute whatever they like towards regional chambers. New clause 8 would prevent, constrain, inhibit and stop authorities from being able to contribute freely to the perfectly reasonable activities of regional chambers. Local authorities would not be able to use council tax to raise resources for regional bodies. I challenged the hon. Member for Cotswold to say whether or not Opposition policy is to scrap regional chambers, but his refusal to answer speaks for itself.

Andrew Turner: Will the Minister explain what he understands is meant by the word tax in new clause 8?

Christopher Leslie: New clause 8 has a number of drafting deficiencies. It is not for me to point them all out. The word tax could well mean precept, but it could also mean revenue for those regional bodies. If the hon. Gentleman has a different opinion, perhaps the new clause should have been drafted more precisely. However, the vagaries of the new clause are precisely what caused me to try to gauge from the hon. Member for Cotswold's remarks whether the Opposition were opposed to regional chambers. Again, answer came there none.
	The hon. Member for Ludlow (Matthew Green) supported new clause 8 for entirely different reasons. I hope that the clarifications that I have given will cause him to reconsider.

Matthew Green: They will not.

Christopher Leslie: That is very alarming. If the Liberal Democrats are also saying that council tax revenues should not be used to support regional bodies, they may find themselves in the same pickle as the hon. Member for Cotswold, who said that he would not allow council tax revenues to be used for regional bodies such as flood defence committees. I know that the hon. Member for Ludlow does not like the concept of council tax, but we have no alternative to it at present. The new clause would have a very significant effect, and I urge the hon. Gentleman to reconsider his position.

Matthew Green: We shall not change our minds on this matter because we believe that council tax should not be used to raise revenue for any bodies, even local councils. Instead, there should be a local income tax.

Christopher Leslie: Presumably, therefore, the extension of that rather dubious logic is that the hon. Gentleman will oppose any changes to council tax because he disagrees with the tax in principle.

Matthew Green: indicated assent.

Christopher Leslie: Will he also refuse to countenance the use of council tax in any local government revenue plans in the future? Will he shun that appalling mechanism for raising revenue? I do not think that that is the position of the Liberal Democrat party. Surely there must be some strand of pragmatism among its members? The party will need it if, God forbid, there is ever a Liberal Democrat Government, at some indeterminate point in the future, who want to change the system. The hon. Gentleman must work in the system as it exists at present.
	I am most concerned about the love and enthusiasm for local income tax exhibited by the hon. Member for Ludlow. I would not want to pre-empt the Government's funding review because we accept that there are significant issues around how local government should raise revenue and around making sure that it is tied to local accountability and principles. While not ruling out options which that review might examine, I caution against the hon. Gentleman's enthusiasm for local income tax. There may be a lot of income in Kingston and Surbiton that could be taxed, but there is less in other Liberal Democrat authorities such as Liverpoolwhich may find raising revenue through a local income tax extremely difficult. I only speculate because it would not be right to address that particular issue, which is for debate another day.
	Council tax does relate to wealth, albeit capital wealth, and, as many hon. Members will remember, it is more progressive than the poll tax. There are certainly ways in which it could be improved. The Bill makes provision for banding and revaluation, which we believe are the mechanisms that should be used to make sure that council tax is more relevant and up to dateand that it relates more to ability to pay. New clause 8 is wrong in its conception, design and drafting and would have a significantly detrimental effect on some regional bodiessome of which do extremely important work. We need to know whether the movers of the new clause propose to scrap regional chambers and to stop funding regional and coastal flood defence from council tax.

Geoffrey Clifton-Brown: Occasionally when one moves a probing amendment or new clause, one strikes gold. On this occasion, it is clear that we have exposed a huge new revenue-raising power for emerging regional bodies. The part of the Bill to which the new clauses apply is anyway far-reaching. It provides for a mandatory revaluation cycle, and gives the power to change the number of council tax valuation bands and introduce transitional arrangements. There was a lengthy debate in Committee about how to enforce the payment of council tax by some of the poorest people in this country by distress of their assets. Where their assets are insufficient to cover the costs of that distress, the outstanding debt can be the subject of an attachment to earnings order.
	We have suddenly discovered that all the new powers in the Bill can be used to raise money for emerging regional bodies.

Desmond Swayne: Shocking.

Geoffrey Clifton-Brown: My hon. Friend is absolutely right. That purpose is not in itself shocking but it is not transparent. I pressed the Minister several times to state the costs being incurred by the transitional regional bodies but he did not give me one example. I pressed him in respect of the north-east but still he did not give me one example. I have given examples of regional planning and housing bodiesall of which will have staff, expensive buildings and a budget. How will they be funded?

Christopher Leslie: I suspect that the hon. Member for New Forest, West was describing the hon. Gentleman's contribution. The hon. Gentleman is well aware of the millions of pounds raised from council tax precepts towards perfectly reasonable expenditure on regional flood and coastal defence committees, which the new clause would prevent. Does the hon. Gentleman really intend that those regional bodies should be bereft of that funding? Does he say that existing regional chambers should also be wound up and be bereft of funding?

Geoffrey Clifton-Brown: With great respect to the Minister, who is a pretty straightforward man, he is equivocating. He will still not give us a clear answer as to how much money is likely to be raised through those mechanisms, and for what regional bodies. He has now introduced to the argument the fact that we might have regional arts bodies, regional tourism bodies or regional flooding bodies. How many more regional bodies are we to have? That council tax could be used as a mechanism to fund all those regional bodies in performing functions that are currently paid for from general taxation. We can thus conclude only that there will be an additional tax-raising power for all the functions that those regional bodies will have and which do not currently exist. The Minister has still told us nothing about that.
	We have still not had straightforwardness as to how much of that regional council tax will fund the elected regional assemblies to be set up under the Regional Assemblies (Preparations) Bill that is currently in another place. It is all very well for the Government to say that the Bill does not give the detail for each region; I realise that that information will be separate from the Bill. Nevertheless, the Bill is the paving measure that will give rise to those elected regional assemblies, if we ever get as far as a referendum and a positive vote in favour of them.

Christopher Leslie: I repeat that we envisage that elected regional assemblies might levy a precept of about 5p a week from a band D taxpayer. To aid the hon. Gentleman, that amounts to 2.50 a year, not 25. However, before we even get to elected regional assemblies there are existing regional bodies that receive revenue from precepts. Is the hon. Gentleman saying that the new clause will stop that, or not? I have asked him about four times and I should appreciate an answer.

Geoffrey Clifton-Brown: When will the Government be straightforward about their proposals? They are making the decisions; the job of the Opposition is merely to probe them as to their intentions, not to state our policy. We want to know something about the costs of those regional bodies and how they will be funded. Will they be funded from council tax?
	I shall give the Minister some figures so that we can see whether we are in the same ballpark. We already know about the costs for the new Parliament building in Edinburgh and the Assembly building in Wales, and that when public sector buildings are needed for the new regional bodies, significant costs will be involved. The abolition of Humberside alone cost 80 million. Extrapolate from that the cost of abolishing all county councils and the sum would run into billions.
	As we advance towards elected regional assemblies, we are entitled to know what sort of sums the Government have in mind and how those bodies are to be funded. Will they be funded in full by the regional council tax or will there be other tax-raising powers?
	We could continue to press the Government and embarrass them further. Suffice it to say that very large sums are involved and it is not clear that the functions taken over by those regional bodies will cease to be undertaken by somebody elsefor example, the Minister's Department. Would the departmental budget then be reduced? It would have been useful had the Minister told us about that. Perhaps he will intervene again. If he plans to raise all that money for regional bodies through the regional council tax, will his departmental budget be reduced in lieu? As taxpayers, we are entitled to answers. The Minister shakes his head, but we, as taxpayers in general, are entitled to answers to those questions.
	How many more regional bodies will be set up? The Minister has already referred to regional arts boards, regional tourism boards and regional flooding boards. How many more? Regional planning bodies and regional housing bodies do not yet exist. How much will they cost? How many buildings will be needed to house all those functions? We have not heard a single word from the Minister about the costs of those regional bodies. Council tax payers throughout the land who are likely to have to fund the cost of those bodies are entitled to some answers.
	There has been a singular paucity, indeed a complete lack, of answers from the Government. Taxpayers can only conclude the worst. We may have been told that the amount will be only 25p a week in the first instance, but, by golly, in a year or two that amount will escalate many, many times.
	The Minister laughs, but council taxpayers up and down the land will not laugh when they begin to get increased council tax bills of well over 1,000 for a band D house this year. They will not be laughing; they will be pointing an accusing finger at the Government because those increases are very significant.
	We have heard no answers from the Government this afternoon. I respect the Minister, but it is fairly typical of the Government that they have failed to give us any answers. The only mechanism that we can use to protest vigorously is to press this matter to a vote, and I ask the House to accept new clause 8.

Question put, That the clause be read a Second time:
	The House divided: Ayes 178, Noes 298.

Question accordingly negatived.

New Clause 13
	  
	Employment Rights of Local Authority Employees

'.(1) No employee whose employer is a local authority or local authority company shall be required to work at any time on both a Saturday and a Sunday in the same week if that person has the care and control of a schoolage child.
	(2) Any adult with whom a schoolage child customarily lives as part of his or her family has the care and control of that schoolage child and where more than one adult qualifies under this test each of them has the care and control.
	(3) In this section:
	employee and employer
	(a) in relation to England and Wales, and Scotland, have the same meaning as in the Employment Rights Act 1996, and
	(b) in relation to Northern Ireland have the same meaning as in the Employment Rights (Northern Ireland) Order 1996;
	local authority means a local authority in any part of the United Kingdom, including the Common Council of the City of London but excluding a parish or community council.
	local authority company means a company through which is exercised a power conferred under section 95.
	week means a period of seven consecutive days ending on a Sunday.
	schoolage child means a person who has attained the age of five but has not attained the age of eighteen.'.[Andrew Selous.]
	Brought up, and read the First time.

Andrew Selous: I beg to move, That the clause be read a Second time.
	It is a great pleasure to move this new clause, which has support in all parts of the House. It is a modest but necessary measure as far as local authority employees are concerned. As I said, there is something in this clause that all Members should feel able to support.
	The new clause will ensure that the children of local authority employees do not have parentless weekends. The new clause would mean that local authorities would not be able to force their employees with school-age children to work on both a Saturday and a Sunday. Our constituents would be amazed to learn that legislation is not already in place to prevent that from happening.
	The evidence showing the need to do something about the problem comes from many sources, not least from the Joseph Rowntree Foundation/National Centre for Social Research report that was published in December 2002 entitled Happy Families? Atypical Work and Its Influence on Family Life. Among other things, it showed that 20 per cent. of working parents with dependent children work on both Saturday and Sunday and that three quarters of them wish that they did not have to work at weekends.
	I am, of course, aware that local authorities have to provide many vital services seven days a week. Local authority care homes immediately spring to mind, and tidy tips, some libraries and leisure centres seek to open seven days a week. There is nothing whatever in the new clause that would prevent local authorities from running services seven days a week. It would not put a barrier in the way of a local authority asking any of its staff to work on either a Saturday or a Sunday. However, it is entirely reasonable not to allow local authorities to force their employees with children at school to work on both Saturday and Sunday. If authorities were allowed to do that, the children would not see their parents at the weekend.
	I have spoken to local authorities in my area and to the East of England Local Government Conference. They have told me that they do not believe that the new clause would create a serious problem for the running of authorities and that it would have only a minimal impact. However, it is necessary, given that 3 million parents work on both Saturday and Sunday. We know from recent events in Stoke-on-Trent, where plans to provide refuse services on Saturday and Sunday were withdrawn by the council, and in Richmond, which recently ran into difficulties with the provision of library services because of the way in which it imposed on its staff, that we need to address the issue.

Alistair Burt: I have listened to my hon. Friend's argument with interest. Does he not agree that it is a curious feature of modern life that, whereas the many enjoy much more choice, they occasionally do so at the expense of the few? Does he share my hope that, if this modest measure were adopted, private enterprise might see the lesson and introduce, of its own volition, similar provisions to ensure that people in the private sector who work on Saturday and Sunday and whose children endure parentless weekends might enjoy a freedom similar to the one that he is suggesting?

Andrew Selous: This new clause relates to local authorities, but I am sympathetic to the general point that my hon. Friend makes. He made the valid point that we need to be aware of the costs imposed on the employees who provide the services that we expect from local authorities on Saturday and Sunday. I am fully conscious of the fact that many local authority services have to be provided seven days a week, but this modest but necessary measure would provide some protection to local authority employees and prevent them from being pressed to work on both Saturday and Sunday.

Paul Goodman: Has my hon. Friend received support from Labour Members for his proposal given that trade unions must be extremely concerned about the problems that he so eloquently describes?

Andrew Selous: As I said, the new clause is supported by all parties and hon. Members on both sides of the House. I should have thought that a Labour Government would want to be associated with it. Indeed, there is an onus on anyone who opposes it to justify why local authority employees with children, whom they would not otherwise see, should be forced to work on both Saturday and Sunday. I hope that the Minister will address that. Although it is up to me to make the argument for the new clause, it is up to the Government to justify the forced working of parents of school-age children on Saturdays and Sundays.

Martin Smyth: Would it not be strange for the House, which voted for family-friendly hours and mid-term breaks to allow us to be with our children, to vote against the proposal? It is not even limited to the nuclear family, but covers the broader spectrum of family life in which children need adults and adults need children.

Andrew Selous: The hon. Gentleman makes a valid point and is right. People outside this place look at the conditions that we grant ourselves. Those who work for local authorities are entitled to request and require us to extend the same protections and principles to them in their important work.

David Cairns: As a non-parent, I have some sympathy with the new clause, although I suspect that more formal consultation will be needed before the Government accept it. However, I look forward to hearing what the Minister has to say. I am genuinely curious to know why the hon. Gentleman has limited the new clause to children of school age. In developmental psychological terms, surely the forming of the bond between parent and child is most important in the years up to the age of seven.

Andrew Selous: I understand that point. It is not that I think that the time that parents and young children spend together is unimportant, but those children who attend primary and secondary schools have fixed hours when they have to be in school. Their only opportunity to see their parents is on a Saturday or Sunday. If the House and the Government intend to deny those children and parents the time to be together as a family on one day a week, that is a sorry state of affairs. I look to the Minister to give us some comfort on that.

Matthew Green: We support the new clause. It will be interesting to hear the reasons against it. Frankly, we have a 24/7 society and, unfortunately, some people have to work at weekends so that the rest of us can enjoy the ability to make choices on Saturday and Sunday. The House would never consider sitting through the weekend. We can all choose what we want to do. No doubt many of us hold our surgeries and carry out constituency work, but we can choose whether to see our children. I am delighted to be the father of a six-week-old child, although I unfortunately missed the chance to serve on the Committee because I wanted to spend time with my child immediately after the birth.

Geoffrey Clifton-Brown: Paternity leave.

Matthew Green: Indeed.
	It is important for the development of children that their parents should have the right to spendawful wordquality time with them during the week, not just a snatched half hour in the evening when children are tired and their parents probably are too. The new clause is worthy of support. As the hon. Member for South-West Bedfordshire (Andrew Selous) made clear, Members who oppose it will have to come up with interesting reasons for doing so, as most of us would struggle to argue with its worthwhile aims.

David Cairns: Briefly, I have a great deal of sympathy with the underlying aim of the new clause, and I look forward to the Minister's response. Although the hon. Member for South-West Bedfordshire (Andrew Selous) has researched the matter through contact with his own local authority, other local authorities may not have its flexibility, and their safety critical provisions could be affected by the new clause. That is only a surmise, but perhaps the Minister will tell us whether the Government have undertaken a survey.
	At the risk of straying from the narrow confines of the new clause, I should point out that I am currently trying to steer a private Member's Bill through the House that would stop Sunday working being obligatory for shop workers in Scotland, a legal protection enjoyed by constituents of hon. Members who represent English and Welsh constituencies. When legal protection on Sunday working was given to shop workers in England and Wales, Labour's home affairs spokespersonnow the Prime Ministersaid freedom to shop on Sunday must go hand in hand with the right not to have to work on Sunday. Shop workers should not suffer so that others can enjoy those freedoms. Surely, then, our freedom to enjoy non-essential council services must go hand in hand with the rights of those who are working to provide those services.
	Most council services, including the more flexible ones, are not provided on Sundays. Those that are provided tend to be essential. When I was a councillor in London, councils adopted more flexible working practices in, for example, the delivery of meals on wheels. People did not have to go out on Sunday, as clients were provided with microwave ovens, steamers and so on. Under the current regulations, it is possible for councils to order their working week so that people are not required to work on Sunday. People staffing certain council facilities may be required to work at times when they would otherwise not have to work if the local authority had a more enlightened attitude as an employer. In the absence of such an attitude, legislation may be necessary, so the hon. Member for South-West Bedfordshire could well be on to something in his new clause.
	I am looking forward to the response to a wide-ranging consultation that the Secretary of State for Scotland is undertaking with businesses throughout Scotland, which will affect my Bill in Committee. A consultation of local authorities to assess the impact of weekend working may not have been conducted. If so, I may not be able to support the hon. Member for South-West Bedfordshire if he pushes his new clause to a vote, but I am strongly sympathetic to his aims.

Gary Streeter: I, too, shall make a short contribution. Someone famously said that you could not buck the market. It is also true that you cannot buck nature. No one can sustain a working pattern of seven hours a day, seven days a week. Families cannot survive unless there is an opportunity outside work for parents and children to spend quality or quantity time together and learn from another. I strongly support the modest measure proposed by my hon. Friend the Member for South-West Bedfordshire (Andrew Selous), as it sends an important signal.
	We enact laws in this place not just for the benefit that the law will bring, but also for the signal that it sends to the wider community. I agree with my hon. Friend the Member for North-East Bedfordshire (Alistair Burt) that although the new clause is a modest measure limited to local government and local government companies by the nature of the Bill, it sends a signal to the wider community. I hope that it sets an example to many private sector companies that want to be good employers and want to learn best practice. It might encourage them to put parents of school-age children at the centre of their thinking when they plan their rotas. For large companies and large organisations such as local councils, that might be a little inconvenient, but they could cope with it. The benefits would be immense.
	We must recognise that family life is under pressure. We all sit in our surgeries and listen to case after case linked to the Child Support Agency, welfare benefits and so on. We think about the children involved in some of those cases, who are denied time with their parents or are subject to some other pressure. For people like me, who had the advantage of growing up in a secure family setting, spending time with parents and learning right from wrong, even if we did not always agreewe all have our momentsit is horrifying to think that so many children today are denied the consistency of parental input. The new clause is an important attempt to put that right.
	We heard, I think, that 20 per cent. of parents work on both Saturdays and Sundays. Will my hon. Friend confirm that that was the statistic that he gave?

Andrew Selous: My hon. Friend is right. According to the Joseph Rowntree study, 20 per cent. of parents of school-age children work on both Saturdays and Sundays, and three quarters of them wish they did not have to do so.

Gary Streeter: I find that a terrifying figure. If it is right, when do those school-age children spend time with their parents? We know that children watch a lot of televisionI do not criticise thatlisten to a lot of music, and spend time with their peer groups. They are getting their values and standards from somewhere, and surely that should be primarily from their parents.
	On quality time as opposed to quantity of time, I am fortunate that both of my children are adults and therefore off our hands.

Robert Syms: My hon. Friend does not look old enough.

Gary Streeter: I know; say it again. I remember a classic example of when my son was a teenager of 15 or 16 and going through some of the things that teenagers go through.

Christopher Leslie: Bored with his father.

Gary Streeter: I hope those comments are being picked up by Hansard. They do not always reflect well on those who make them.
	My son was working on his computer in our front room. I was lying on the floor reading something or other, and for several hours there was little interaction between us, but after a while, because we were in the same room together, he suddenly piped up and wanted to discuss something that had been troubling him. That would not have happened if we had not spent time together in the same room, even though we were not interacting. Time together is important for parents and children. It is not a touchy-feely thing; it matters.
	The measure proposed by my hon. Friend the Member for South-West Bedfordshire is an important improvement to the current law, and I hope the Government will respond positively to it.

Steve Webb: Most of that which needs to be said has been said, so I shall be brief. I welcome the new clause and commend the hon. Member for South-West Bedfordshire (Andrew Selous) on moving a modest, limited clause that could do some families some good. So often, because we cannot do everything that we would want to do, many of us fail to do anything. I hope it will not be patronising to say that although the hon. Gentleman has been in the House for a relatively short period, he is putting to shame some of us who could have done the same thing, and I commend him for his initiative in doing so and for his well researched argument in support of his case.
	The hon. Member for Greenock and Inverclyde (David Cairns), who has his own private Member's Bill dealing with weekend working, observed that many council services are not provided on a Sunday, but there may well be pressure for that. The hon. Gentleman cited examples of councils that were looking to expand weekend services. We need to put the safeguards in place now, not when the expansion has already taken place and we cannot get the genie back in the bottle.
	I also commend the fact that the hon. Gentleman is concerned about all sorts of families. Essentially, the new clause deals with the welfare of children. Whether children and parents are in lone-parent families, two-parent families or families of any shape or size, it is in their interests to spend time together. This modest new clause would help to achieve that.
	A question was properly raised about children of pre-school age and their need to spend time with parents. I am aware from experience in my area that bodies such as Ofsted report that children starting at primary school show all the hallmarks of not spending time with parents. The hon. Gentleman is right that those are important and formative years. In a world in which children are increasingly starved of parental attention, often because both parents are working simply to meet the cost of their mortgage, the sort of protections that he is trying to introduce are entirely appropriate. If anything, they are more needed today than ever before.
	I am delighted that the hon. Gentleman tabled the new clause. Should there be an opportunity now or in future to support it in a Division, I shall be very pleased to do so.

Paul Goodman: I should also like to congratulate my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) on tabling the new clause. I know from serving with him on the Select Committee on Work and Pensions that he takes a serious and informed interest in issues of social exclusion.
	I want briefly to make a suggestion to the Minister that he may find helpful. I suspect that he is about to tell us that, as matters stand, he cannot accept the new clause. I suspect that one of the reasons that he will give is that the Government cannot single out local authority workers as the new clause suggests. My first suggestion is that he should take up the idea of the hon. Member for Greenock and Inverclyde (David Cairns) and try to see how local authorities would respond to the measure on a wider basis than that which my hon. Friend has so far had a chance to investigate.
	Secondly, if the Minister is going to argue that the Government are unwilling to single out local authority workers, it would be helpful to give some hint of whether they are considering more widely the problem about which my hon. Friend so eloquently spoke with regard to parents and children. Since the Labour party tends to regard the vulnerable and those on low wages as its special propertyI profoundly believe that that is an error on its parthe may want to spell out a little more fully how he might give workers generally the protection that my hon. Friend is seeking for local authority workers. I am sure that my hon. Friend would also want the measure to be more widely extended.

Geoffrey Clifton-Brown: I think that my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) has done his constituents who are local authority employees a great service today. Indeed, he has done all our constituents who are such employees a service. I suspect that this will be one of those landmark occasions in the House when the Minister may not accept a proposalin this case, the new clausebut the idea that it contains will be like a seed, as it will germinate and put down roots and everyone will suddenly become convinced of its merits.

Tim Boswell: In anticipation of the Minister's possible response, does my hon. Friend agree that it may be necessary to give thought to circumstances in which there might be an override? For example, a particular emergency might require the services of people with family responsibilities. One looks to the Minister not merely to respond that difficulties in respect of one emergency invalidate the important principle that is being floated and established today, and welcomed from the Opposition Front Bench.

Geoffrey Clifton-Brown: My hon. Friend, who has great experience in these matters, makes a prescient point, as he alludes to a part of my speech to which I was about to come.
	My hon. Friends the Members for South-West Devon (Mr. Streeter) and for North-East Bedfordshire (Alistair Burt) and others sitting behind me, including my hon. Friend the Member for Wycombe (Mr. Goodman), have spoken very eloquently about the need for a more family friendly atmosphere. My children are now in their later teens, but when they were at a more formative age, time spent with them at the weekend, especially over Sunday lunch, was extremely valuable. Even as a Member of Parliament, one was able to make time to spend with one's family. Nowadays, too many children grow up without spending enough time with their parents. They do not have that prime time in which to interact and learn from their parents.

Desmond Swayne: Does my hon. Friend agree that time at the weekend is even more important for children who have divorced parents?

Geoffrey Clifton-Brown: My hon. Friend makes an important point. Perhaps if they spend more time with their parents, they will be able to form better relationships. The Minister should take that into account.
	Why is it necessary for local authority employees to work on Saturdays and Sundays? Of course, some emergencies, to which my hon. Friend the Member for Daventry (Mr. Boswell) alluded, such as flooding, require local authority employees to work. That also applies to some enforcement functions, such as trading standards, some public information services and some payment collection services, such as council tax collection. However, local authorities should generally be able to organise their functions so that employees are not required. That is a key word in the new clause.
	It is different if employees volunteer to work at the weekend. When they volunteer, and even when they are required, they generally get time off in lieu. However, such time off is not especially satisfactory for people who are required to work, because it is likely to be given during the week when children of school age are at school.
	What research has been conducted on the matter? How many local authority employees work on a Saturday and Sunday? I doubt whether comprehensive research has been conducted, but it would be interesting to know whether, as a result of the new clause that my hon. Friend the Member for South-West Bedfordshire tabled, it could be undertaken to ascertain the answer to important questions. How many local authority employees who work on Saturdays or Sundays have children of a school age? What would alternative arrangements cost each local authority?
	I hope that my hon. Friend the Member for South-West Bedfordshire will cause the Government to consider the matter seriously. Perhaps local authorities can set a trend that other employers will follow.

Nick Raynsford: Our debate has been useful and I understand the entirely proper concern, not only of the hon. Member for South-West Bedfordshire (Andrew Selous), but of all other hon. Members who spoke, about ensuring family-friendly employment policies. However, I cannot accept the new clause.
	The hon. Member for South-West Bedfordshire called for more protection for workers against being required to work on Sundays so that families can have one shared day a week when they do together what they please. I assume that the new clause intends to further the campaign, but I am unclear about the reasons for singling out the local government sector for special treatment.
	There is no special local government case for such a provision. Existing employment law fully protects local authority workers. Local authorities are generally ahead of the game in promoting flexible working. The Department of the Environment, Transport and the Regions conducted research and produced a report, Work-Life BalanceA Survey of Local Authorities in 2001. It found that 94 per cent. of authorities operate job sharing, 95 per cent. operate flexitime and 64 per cent. provide more maternity pay than the law requires. I could cite many other examples.
	In local government, circumstances will always arise in which people need to work at weekends. That would regularly apply to, for example, residential care homes, where care needs to be provided 24 hours a day, seven days a week. Similarly, local authority leisure facilities such as swimming pools, sports centres and parks need to be open at weekends if they are to provide for the leisure needs of local residents, including families who will want to be able to go out to a park or to go swimming together. It would be perverse to deny people that option given that we are trying to encourage family-friendly policies. In less regular circumstances, similar considerations apply to, for example, emergency services, which the hon. Member for Cotswold (Mr. Clifton-Brown) mentioned. To take a recently topical issue, road gritting in adverse weather conditions or other environmental and security emergencies require staff to be able to work at weekends, often at short notice.

Alistair Burt: The Minister's argument is taking a curious turn. Neither my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) nor any other hon. Member suggests that services should be denied. We suggest that it should be possible to change rosters or other arrangements so that, where two parents are involved in working, their children should not be prevented from seeing them. No one is suggesting that any service should be denied, so that is not a good reason to reject the new clause.

Nick Raynsford: If that argument is validI can see some force behind itany provision would have to apply to the whole work force and there would be no particular case for singling out local authorities. That is not within my remit; it would be a matter to press with my colleagues in the Department of Trade and Industry. It is important to recognise that some local authority services require substantial attendance because weekends are the times when they are busiestI particularly singled out leisure-time activities. It might be difficult in some cases to operate a roster that guaranteed such provision.

Gary Streeter: The new clause relates to local government and local government companies because we are discussing a local government Bill. As many hon. Members have said, it is to be hoped that it could be the forerunner to a wider application of the law that would in due course protect employees in every sector.

Nick Raynsford: I fully understand why the new clause has been framed in such a way as to apply only to local government: it would otherwise be out of order. That does not in any way change the logic that there is no case for singling out local government for differential treatment, especially given that the available evidence suggests that, on the whole, local authorities are ahead of the game in adopting family-friendly policies.

Paul Goodman: The Minister is following the line of argument that I anticipated. Can he therefore give any assurance that the Government are investigating generally the problem that the new clause seeks to address?

Nick Raynsford: I intend to come on to some of the measures that the Government are taking to promote family-friendly policies.

Matthew Green: The Minister's argument is a little perverse. He argues that the measure is unnecessary because local authorities are good employers anyway, but then says that it would put a burden on them. It must be one or the otherit cannot be both.

Nick Raynsford: The hon. Gentleman is getting excited about his observation, but I am afraid that, in the usual way of the Liberal Democrats, it is wrong. The case for imposing special obligations uniquely on local authorities, rather than on any other employers, would possibly be justified if they were not operating good policies. However, given the evidence that they are probably ahead of the game, it is extremely oddalthough Liberal Democrat Members perhaps do not recognise thatto single them out to impose more onerous obligations on them than on other employers.

Martin Smyth: The Minister will remember that, when we dealt with Sunday trading, provision was made on a specific issue, although it has not always been kept to. Does not the same argument apply now: we are dealing with local government, so we want to secure protection for local government workers? We should also bear in mind the perverse attitude of some employers, who may say to people who work in shops, or in local government if we go down that road, We can't employ you if you aren't prepared to work every Sunday.

Nick Raynsford: I want to avoid widening the debate too far, because we shall be out of order. This is specifically about local government. I reiterate that I know of no evidence to suggest that local authorities are unusually unsympathetic to the aspirations of employees who have family responsibilities that would justify the implementation of a special measure in the Bill that did not apply more generally.

Calum MacDonald: We are all sympathetic to the aims of this new clause, but regardless of our views on its merits, should not such provisions be left to local government, rather than being imposed by central Government? For example, my local authority does not open any leisure facilities on Sundays; it takes a policy decision not to do so, and other local authorities are undoubtedly equally free to take such a decision. Is it not curious that the Liberal Democrats and the Tories, who advocate local decision making, want to be centralist in this particular respect?

Nick Raynsford: My hon. Friend makes an extremely good point, which I was about to come to. Throughout consideration of this Bill, we have heard repeated complaints from the Conservatives and the Liberal Democrats about the Government imposing unreasonable, centralising obligations on local government. Here we have a classic illustration of their being wholly inconsistent, and yet they look pained when such inconsistency is pointed out to them. When it suits them, they say, Liberalise, and give more freedom to local government, but when the latest issue reaches their ears, they say, Nowe must legislate to impose an obligation. Then they look outraged when they are reminded that they are being inconsistent. That is absolutely typical of the Liberal Democrats, who never know which way they are pointing, unless they get an indication as to which way electors are likely to vote. Then, they say what they think will please electors.
	The Government are keen to promote family-friendly policies, and we have a commitment to helping to support working parents. On 6 April 2003, a series of new rights specifically for parents will be introduced. They include a new right for parents with children under six, or for parents with disabled children under 18, to ask their employers for flexible working arrangements. The law will place a duty on employers to consider such requests seriously, and the Employment Act 2002 specifies only eight business grounds on which such requests can be refused. So there are measuresalong with others that are the responsibility of my colleagues in other Departmentsto help promote family-friendly policies. That is the right way forward, rather than trying to single out local government for special treatment. I therefore urge the hon. Member for South-West Bedfordshire to withdraw the new clause.

Andrew Selous: I am extremely grateful to those hon. Members who have made contributions on this new clause. I am grateful to the hon. Member for Ludlow (Matthew Green) for his support, and I noted with interest the suggestion of my hon. Friend the Member for Daventry (Mr. Boswell) that we could usefully have emergency override provisions where a local authority had a specific need to bring them into effect. I am also grateful to my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) for his response. He, like other Members, called for a period of consultation on the full effects of the provision; indeed, the hon. Member for Greenock and Inverclyde (David Cairns) said that his private Member's Bill made a similar undertaking. I would be sympathetic to having such consultation before we make further progress.
	I have to say that I was extremely disappointed with the Minister's reply. He pointed out that local authorities operate seven-days-a-week services, but so did I when I moved the new clause. There is nothing in it that would prevent local authorities from providing such services. All that this modest measure would do is to prevent local authority employees from having to work on a Saturday and a Sunday. For the Minister to say that playgrounds and leisure services would be denied to the broad mass of the population within a local authority area

Nick Raynsford: indicated dissent.

Andrew Selous: The Minister was getting quite close to doing so.

Nick Raynsford: I hope that the hon. Gentleman recognises that I did not say that, and that he accepts that that is a misrepresentation of the position that I adopted.

Andrew Selous: I apologise if I misrepresented the MinisterI was trying to listen carefully to his argument. Of course, all of us in this House want leisure services to be open seven days a week, and I very much include myself in that. I am simply asking the House to agree that we should extend the same right to local authority employees themselves, who would perhaps like to go to a local park or to a playground with their children on a Saturday or Sunday and spend time with them. Some of them cannot for want of a clause such as new clause 13. I do not think that that is overstating the case.

Geoffrey Clifton-Brown: If the Minister had said that local authorities should voluntarily adopt working rosters so that people with children of school age would not be required to work on a Saturday or Sunday unless it was absolutely necessary, it would at least have been a start. Does my hon. Friend think that we could have expected that from the Minister?

Andrew Selous: Of course, I would have welcomed encouraging remarks from the Minister.
	I want to take up the point raised by the hon. Member for Western Isles (Mr. MacDonald). He asked why we could not leave these matters to local authority discretion. He comes from a part of the country with a long cultural tradition under which such matters are taken very seriously. I quite understand the decision of his local authority; I respect and applaud it. However, he will acknowledge that many of us come from parts of the country without such traditions. This Parliament must deal with matters on a national basis.

Edward Davey: I endorse what the hon. Member for South-West Bedfordshire has said. Employment law is national and has never, under any party, been decentralised to local authorities. The Liberal Democrats would never wish to decentralise employment law to local authorities. There have to be minimum standards and the hon. Gentleman's proposals are along those lines.

Andrew Selous: The hon. Member for Kingston and Surbiton (Mr. Davey) has summed up the situation fairly and accurately.

Calum MacDonald: This is not an employment Bill but a local government Bill. We are changing local government law. My point is still valid. If my local authority wanted to carry on doing what it does and close leisure facilities on a Sunday, and this House passed a law that said, Noyou have to open leisure facilities on a Sunday, for the benefit of the rest of the public, the hon. Gentleman would be the first to object. The issue is between centralising principles and local democracy.

Andrew Selous: I will come on to the point about local authorities, but the example that the hon. Gentleman raises is not one that would come under the new clause. The new clause is not about forcing local authorities to open particular services; it is merely about giving some protection to local authority employees so that they too can enjoy those services.
	The Minister asked, Why local authorities? and then answered the question himself: this is a local authority Bill. I see absolutely no reason why local authorities could not lead the way in this area, setting an example to other employers.
	I understand that my noble Friends in the other place, with support from other noble Lords of all parties, will seek to reintroduce a similar amendment.

Gary Streeter: Does my hon. Friend agree that it was not only the words of the Minister's reply that were disappointing but their tone? It seems that he has misunderstood the spirit of this debate. Here we are, trying to do our best for parents, children and familiesthe very people the Government say that they want to supportbut the Minister has not taken up that spirit. Does my hon. Friend share my hope that the Minister, who is a reasonable man, will reflect on this debate and perhaps encourage his noble Friends in the other place to be more gracious in their response to this proposal?

Andrew Selous: My hon. Friend has made a fair point and has just reminded me that the new family-friendly measures to which the Minister referred do not, as far as I am aware, address the specific points that would have been remedied by the new clause. Those points are significant and the Minister did not address them.
	I will seek leave to withdraw the new clause, but I serve notice to the Minister that this will not be the last time that the Government hear about this matter. My noble Friends, with support from noble Lords of all parties, will seek to revisit this matter in the other place. I beg to ask leave to withdraw the motion.
	Motion and clause, by leave, withdrawn.

New Clause 18
	  
	Council Tax on Residential Care Accommodation

'. Care and nursing homes registered with the National Care Standards Commission shall be counted as one unit for council tax purposes.'.[Mr. Heathcoat-Amory.]
	Brought up, and read the First time.

David Heathcoat-Amory: I beg to move, That the clause be read a Second time.
	The new clause would remedy an injustice in the law by relieving small units in residential and nursing homes from being separately assessed for council tax. At present, accommodation units that have the rudiments of self-catering facilities are in danger of incurring full council tax, even though the occupants are residents of a home and dependent on the care of that home.
	The issue was brought to my attention by the residents of the Kathleen Chambers home in my constituency. It is a home run by the Royal National Institute of the Blind to a very high standard. In October 2001, 19 residents of the home wrote to me about their imminent assessment for full council tax. I raised the matter in the House on 20 November 2001, and the then Minister, the hon. Member for Southampton, Test (Dr. Whitehead), invited me to write to him and undertook to look into the matter. I then engaged in lengthy correspondence with the Department and I was assured that
	we are aware of the problem you highlight and are presently reviewing the regulations to see if they can be updated to reflect new forms of residential care.
	The RNIB also supplied a large amount of background information to the Department.
	The problem has arisen only because of the high standards in that home and others. I know that the Kathleen Chambers home is not the only one affected. My hon. Friend the Member for Rochford and Southend, East (Sir T. Taylor) has also raised the matter in the House, and I know that other hon. Members have similar problems in their constituencies. The Kathleen Chambers home was rebuilt in 1996I had the honour of reopening itand the RNIB followed Government guidelines and used the social services inspectorate to set the standards. Those guidelines include the provision of facilities for people to prepare snacks and drinks for themselves. They state that the units should include
	small kitchen facilities, near or in their own accommodation.
	It was precisely because the home did that that the residents were separately assessed for council tax. The problem will increase. As more homes are updated and meet the higher standards in the regulations, more will be in danger of having separate assessments made.
	I eventually received an assurance that the matter was being looked at and that legal changes were being considered. On 26 March 2002, I received a letter from the Minister thanking me for some information that I had provided and saying:
	This will be helpful to my officials who are currently reviewing the issue to see whether any changes in legislation need to be made.
	I would have thought that the Bill would be an obvious vehicle for any changes that needed to be made to remedy the problem.
	Meanwhile, the RNIB appealed against the assessment. On 18 February this year, it appeared to win the case, having appealed against the verdict of the valuation tribunal and won. However, their celebrations were premature, because the Inland Revenue intends to appeal the decision. The whole matter is therefore back in the melting pot. A great deal of money has been spent on itcharitable funds that would have been spent much better on caring for the blind.
	The people in the Kathleen Chambers home have considerable spirit. I visit the home at election time, and the people there are well versed in current affairs. They know exactly what is going on but are bemused and baffled as to why the matter has been allowed to drift on for more than 18 months, despite reassurances from the Department.
	The people in the home clearly depend on the homethey would not be there otherwise. They have enough problems in life: they are blind, and many are of very slender means. They cannot understand why the Government look on while these unjust assessments are made. They seemed to secure a win in court, but that decision is now subject to another appeal.
	Great anxiety has been caused in the Kathleen Chambers home, and the problem needs to be resolved. I look to the Government to do that by accepting the new clause. There are safeguards in it, because only care homes registered under the care homes regulations would qualify. The matter is therefore policed automatically. If a care home ceases to be so registered, separate assessments could be made for each small unit, as appropriate. There is therefore no possibility of leakage into other dwellings.
	I hope that the Government will bring the matter to a conclusion. It is very regrettable that the Bill as drafted does not do that, despite the written assurances that I received. It is about time something was done, and I await the Minister's response with great interest.

Edward Davey: I rise to support new clause 18. The right hon. Member for Wells (Mr. Heathcoat-Amory) got to the Table Office with the new clause just before I got there with my own proposal. I am glad it happened that way, as the House has been well instructed by the right hon. Gentleman.
	Constituents have not raised the matter with me, but the RNIB and voluntary organisations representing disabled people in general have. However, there may be wider implications for all elderly people, given that standards of care in homes are rising, as a direct result of Government policy. The Government should consider the new clause, because the council tax legislation is ambiguous.
	The ambiguity arises from the way in which care homes and domestic and sheltered accommodation are defined. It appears that the people who assess whether a home fits into the care home category or the domestic and sheltered accommodation category think that the addition of some small extra facilitiessuch as cooking facilitiesto a room will have a specific effect. They deem that those facilities can change what was always intended to be a simple room in a care home, where a person may enjoy the care provided by staff, into a place where the resident can be independent, and therefore liable to council tax.
	We could be at the beginning of an issue that will grow and grow. As care standards improve and facilities are enhanced, what in the past was deemed unnecessary will become more common. Disabled people and residents of RNIB homes may be more affected than others, as they may be more able to make drinks and food for themselves, even though they still need extra care. By contrast, frail, elderly people may not have a need for such facilities. That might be a narrow point but there is the potential for growth. The Minister has been lobbied and received letters on the issue, so he is aware that there are many ways around it. I am informed that he could utilise town and country planning use class orderssuch as the C2 order that currently applies to care homesand tie council tax tests to part of the planning system or to the Care Standards Act 2000, as new clause 18 seeks to do.
	This is not a party political issue but is about making sure that the tax system is updated to reflect the way that care homes are developing and standards are changing. If the Minister cannot accept the new clause, I hope that he will have his solution presented in this House or another place.

Teddy Taylor: I congratulate my right hon. Friend on his presentation of new clause 18. If Parliament is to serve any purpose, his arguments will succeed. The new clause deals with a small anomaly that has cost some charities a great deal of money trying to resolveand it could be sorted out quickly and precisely if new clause 18 were adopted. The vast majority of registered care homes are not affected by the anomaly but are regarded as one rating unit. Only a tiny number of care homes are affected. One of them is Dolphin Court in my constituencywhich I invite the Minister to visit, to see for himself the facilities it provides to people who are desperately disabled.
	I spend a lot of time visiting residential homes. Some of them can be acutely depressing; a group of elderly people are to be seen sitting in a circle looking at each other. Otherssuch as those run by the Abbeyfield Society and John Groomsgo out of their way to provide disabled people with independence and dignity. Not to regard Dolphin Court as a single unit is ridiculous. The individuals who reside there are not independent although they have separate accommodation, together with enablers and facilitators who actively encourage and motivate residents to be less dependent. Guidance is given to each residence on acquiring the skills needed to achieve personal goals. Group meals and activities supplement the individual's living programme. Communal meals are provided, but such care homes try to provide the kind of independent accommodation that encourages disabled people to be more independent.
	The tribunal that considered Dolphin Court stated that while the residents were not able to live independently, their individual flats constituted separate living accommodation and should be assessed accordingly. Uncertainty has existed since 1993. In case after case, evaluation tribunals have decided not to proceed, while othersas in the case of Dophin Courthave proceeded. Charities have spent a great deal of money on professional advice. I have pursued the issue with various Ministersincluding the delightful lady who was Minister of State at the Department of the Environment, Food and Rural Affairs, from whom I received a letter on 19 January 2002, in which she stated that there would be no overall change in rates payable by classifying the property as separate dwellings. She said, Don't worry. There'll be no financial impact.
	I then took the matter up with the Minister of State, Department of Health, the right hon. Member for Barrow and Furness (Mr. Hutton), in a question on 13 November and he said that he would look into it. However, I would like to tell the Government what it means for John Grooms, Dolphin Court, Southend-on-Sea. The council tax payable rose from 700 a year to 4,000, which is a substantial increase and a large amount of money.
	Of course, individuals can apply for rebates. There are 20 residents and the majority receive rebates, but is it really fair that a residential home providing limited basic accommodation is regarded as a single unit while worthwhile organisations or charities such as John Grooms, which try to help people to become more independent, to have more dignity and to widen their contribution to society, are hammered? We are telling those homes to pay 4,000 instead of 700.
	Only a limited number of homes are affected. They are the ones that go out of their way to provide better facilities for people. I am sure that that is the last thing that the Government would want to stop. The Minister should consider the matter seriously, and not just blether, as he sometimes does in these debates. Is he saying that if a home provides people only with meals and the opportunity to look at each other the Government will give them a benefit, but that if a home tries to provide separate accommodation and opportunities that give people more facilities for an independent and dignified lifestyle, they will hammer it? That is what the measure will do. If a home goes out of its way to improve things for its residents, it will be hammered; if it does nothing, it will be okay.
	It is simply a question of logic. The independent valuation tribunal's report on Dolphin Court stated that the residents were unable to live independently, but that it had to regard the accommodation as separate units. I am sure that the Minister will accept that the measure is unfair and unreasonable, and discriminates against people who are trying to provide better facilities, so I hope that he will accept the excellent new clause proposed by my right hon. Friend the Member for Wells. The vast majority of homes are okay; we are simply trying to ensure that all registered homes are treated in the same way.
	As the Minister knows, my right hon. Friend and I, and other MPs, have been troubling him with this issue for quite a while. We have said that something is wrong, and that the situation is unfair and should be put right. Charities have spent a great deal of money to try to resolve the problems. They feel strongly that they are being hammered for going the extra mile for disabled people who require assistance. I hope that the Government will put things right; that is only fair and reasonable.
	If the Minister has any doubts, I hope that he will visit Dolphin Court to see for himself. When people with great disabilities are not merely being looked after but helped to improve their opportunities and to do better in society, that deserves encouragement. However, instead of getting that encouragement, the charities are being hammered. I hope that the Government will do something about it.

Geoffrey Clifton-Brown: The Opposition strongly support the new clause proposed by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). I congratulate him on pursuing the case on behalf of his constituents at Kathleen Chambers House so diligently over such a long period. I echo the words of my hon. Friend the Member for Rochford and Southend, East (Sir Teddy Taylor).
	Since my right hon. Friend drew the matter to my attention, I have been contacted by the Royal National Institute of the Blind, which produced a brief for this debate for Members of Parliament.
	We seem to be moving into the more enlightened regime envisaged by the Care Standards Act 2000 whereby people who are blind or physically disabled can lead as near a normal life as possible. As other hon. Members have said, guidance was issued under the 2000 Act so that facilities would be upgraded to allow residents to live as independent a life as possible.
	As my right hon. Friend the Member for Wells said, the accommodation needs to be brought up to modern standards. Those people need a sink, a cooker and other kitchen facilities to live a more independent life, but that does not mean that individual residents could live a completely independent life if it were not for the general, overarching care provided by the home. The problem is that the individual units become subject to council tax when those minimum care standards are achieved.
	The RNIB makes the point that there is a high degree of regulation and inspection of care homes, so the valuation tribunal has less grounds for concern about illicit operation in care homes than in the housing stock at large. One of the grounds that the Minister might use in rejecting the new clause is that there would be council tax leakage. However, the RNIB also makes the point that, if the premises ceased to be used as a care home, the registration would automatically cease, which would effectively reinstate the exemption from residential care accommodation that used to exist under community charge regulations.
	As my right hon. Friend the Member for Wells has said, it seems totally wrong that the law should be unclear. As my hon. Friend the Member for Rochford and Southend, East, said, cases have gone to valuation tribunals way back as far as 1993. The Minister now has an opportunity to clarify the law. Even if he does not accept new clause 18, I hope that he will accept the principle that my right hon. Friend has established and say that the detailed drafting required to amend the law on council tax regulations will be prepared so that an amendment can be introduced in another place.
	The Opposition support my right hon. Friend's new clause, and I hope that he will press it to a vote and encourage the Government to introduce regulations in another place.

Christopher Leslie: May I first put on record my appreciation of the fact that the right hon. Member for Wells (Mr. Heathcoat-Amory) has raised this issue today? We have had a useful debate and a number of important issues have been raised. I hope that the hon. Member for Cotswold (Mr. Clifton-Brown) will at least give me the opportunity to say my piece and then reflect on what I have to say before drawing his conclusion about whether to press the motion to a vote.
	I have to admit that this is clearly an issue, and the right hon. Gentleman has clearly come up with a possible solution in new clause 18a proposal that would ensure that care and nursing homes registered with the National Care Standards Commission were counted as one unit for council tax purposes. The RNIB has also deduced that that option is a possible solution, and that issue has been raised in correspondence with my Department. Again, I should like to put on record my appreciation of the work done by the RNIBnot just its work on this issue but the wider beneficial work that it does for people with visual impairment.
	Residential homes have traditionally been interpreted in council tax regulations as essentially a series of bedrooms with communal facilities, but, as the hon. Member for Kingston and Surbiton (Mr. Davey) said, such accommodation is becoming increasingly self-containedunits have their own kitchens and bathrooms, for exampleprecisely to facilitate more independent living, and many hon. Members support that as standards are raised. However, that type of accommodation traditionally falls under the definition of separate chargeable dwelling. That is why such accommodation has been billed separately in certain circumstances.
	I was very interested to hear what the hon. Member for Rochford and Southend, East (Sir Teddy Taylor) said about Dolphin Court and what the right hon. Member for Wells said about Kathleen Chambers Housethe home in his constituency. Indeed, I have no reason to challenge what they have said about the circumstances that they have reported to the House. The chargeable dwelling can either be a complete dwellingfor example, a houseor part of a building with self-contained units such as flats. The definition tends to focus on whether there are kitchen and bathroom facilities either in or outwith the unit. The specific test is whether the units have been adapted for use as separate living accommodation; that is the definition in the regulations.
	However, as care homes establish more self-contained units, that can result in residents in the more modern units receiving separate council tax bills for the first time. Obviously, that can be surprising and unwelcome for those residents, and also awkward for the local authorities that have to administer the billing process.
	I want to put on the record the fact that I am very sympathetic indeed to the rationale behind the arguments of the right hon. Member for Wells and the others who tabled the new clause. I hear the suggestions by the hon. Member for Kingston and Surbiton about other mechanisms, such as planning classification, that might be used.
	The hon. Member for Cotswold says that the Government should not be thinking about the loss of council tax revenue, but that is not the reason why I shall, I am afraid, have to ask the right hon. Gentleman to withdraw the new clause. There are drafting issues that mean that the new clause would not fit into the Bill as it was intended to. Moreover, it is not needed, as the changes to the regulations defining a chargeable dwelling can be made by secondary legislation under section 3(5)(b) of the Local Government Finance Act 1992. There are also other issues affecting application to the National Assembly for Wales, which mean that new clause 18 is technically deficient.
	The Government may well decide to exercise our powers to change the regulations and treat all registered care homes as single dwellings. We are considering that in great detail now; the valuation of care homes is being carefully examined and evidence is being collected to see how widespread the problem is. If need be, we will use our legislative powers to remedy the problem.
	The right hon. Member for Wells specifically mentioned that he had written to previous Ministers on the subject and that the attention given to the issue had not been as swift as he would have liked. I have raised the matter with my officials, and I intend to ensure that we can resolve the problem satisfactorily over the coming months. After the useful debate that we have had, which has put everything on the record, I shall go back and redouble our efforts to ensure that we can resolve the problem. In the light of that commitment, I hope that hon. Members will accept that the time has come to withdraw the new clause.

David Heathcoat-Amory: I am grateful to the Minister for his recognition of the problem, and to my hon. Friend the Member for Rochford and Southend, East (Sir Teddy Taylor) for his powerful support, based on another real case. I am also grateful to the hon. Member for Kingston and Surbiton (Mr. Davey), the Liberal Democrat spokesman, who is clearly concerned about the problem too.
	The Minister said that he was very sympathetic to our case. I think that in parliamentary parlance, that means that he will definitely act. He also said that there were avenues for remedying the defect through secondary legislation. He recognised that his Department had been somewhat dilatory in grasping the issue, which has been around for at least 18 monthsif not a great deal longer, according to my hon. Friend the Member for Rochford and Southend, East.
	A great deal of expense has been incurred. In the case that I have described it was incurred by the RNIBa body which I much value, and which I am sure would rather have spent the money on front-line care. As I said at the outset, the problem has also caused much anxiety among vulnerable people for whom life has already created a good many difficulties.
	In the light of the Minister's remarks, howeverI take his assurance at face value that he will find a remedy, and that his Department will grasp the issue with the urgency that it deservesI beg to ask leave to withdraw the motion.
	Motion and clause, by leave, withdrawn.

New Clause 19
	  
	Abolition of Capping Powers

'. Section 30 and Schedule 1 of the Local Government Act 1999 (c. 27) are repealed.'.[Mr. Edward Davey.]
	Brought up, and read the First time.

Edward Davey: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 49, in page 112, line 7 [Schedule 7], leave out 'and 31' and insert
	', 30 and 31 and Schedule 1'.

Edward Davey: It is not often that one gets the chance to react with a legislative proposal so soon after a Minister has made a particular threat. At the weekend, the Deputy Prime Minister, in answer to various journalists' questions, said that the Government were considering capping certain local authorities that were increasing their council tax by large amounts. I was particularly concerned to hear that, as it went against much of what Labour said in opposition and in government with respect to capping powers. I therefore felt that it was appropriate, as we had the chance to do so today, to probe this issue to see whether we could help the Labour Government put on the statute books the policy to which they subscribed in opposition: rightly, Labour in opposition was against capping powers. When the Conservatives were in power, the Liberal Democrats, with the Labour party, used to criticise the way the Conservative Government, time after time, used capping powers to stop local authorities reacting to the wishes of their electorate to invest in services, whether services in our schools, services for elderly people, services for vulnerable children or services more widely in the communities that councillors were elected to represent.
	It is therefore disappointing that, when this Government came to power, they slightly changed their policy. They kept some reserve capping powers, and, to use the Deputy Prime Minister's words, they got rid of crude capping and somehow introduced sophisticated capping in the Local Government Act 1999. Some of us feel that that type of capping is still not right. The reason for that is simple: these issues should be decided by the electorate in the areas of the councils concerned.
	We have some concerns, of course, that councils may be using opportunities to rack up the council tax. When I raised the issue at questions earlier today, the MinisterI think that he had Wandsworth borough council in mindresponded that some councils had cut the council tax before the election and were now raising it significantly. He has a problem with that case, as he well knows, because while I would not wish to support Wandsworth's methodsthe way in which it cut the tax before the election and has now put it up is outrageousthe people who should judge that are the electors of Wandsworth.
	The Minister has another problem: the comprehensive performance assessment of various councils has for some reason rated Wandsworth an excellent council. The Government, under their policy of freedoms and flexibilities, have said that they would not apply capping to those sorts of councils, so they have a real problem with the way in which they approach the matter. It would be simplest to get rid of capping powers altogether, which is the effect of new clause 19. I hope that we will have some support from Conservative Members on that.

Matthew Green: Has not the new formula in fact created a situation in which some councils, in order to move up to what the Government suggest they ought to be spending at formula spending share, would have to introduce large council tax rises? Bridgnorth district council, for example, set a band D rate of around 65 last year, although the assumed national council tax level is 185. The figure is used in the calculation of how much Government grant the authority receives. However, if the authority were to spend at the formula spending sharethe level that the Government suggest might be appropriateit would have to put in a 200 per cent. council tax rise. It has not done that; it has put in a 13 per cent. rise. However, this case illustrates the problem that the Government have created.

Edward Davey: My hon. Friend is exactly right, in the sense that the grant changes this year have been part of the problem. Therefore, it is not right for the Government to blame individual councils. The Government's policy of reforming the grant distribution formula has led in some cases to the large council tax increases. Ministers will say that they have protected local councils by the introduction of floors. However, we all know that those floors were not high enough for many local authorities. Those authorities faced significantly increased costs, such as the national insurance increase, above-inflation salary increases for many local authority employees and increases in insurance costs that were way above inflation. We therefore know that the floors were not sufficient.
	When we take into account the effects of ring-fencing and passporting, particularly in respect of educationwhich is often a large part of the budgets of unitary authorities and county councilswe understand how local authorities have arrived at this position. Not only have they received insufficient grant and faced large cost increases, but they have been given no room to manoeuvre because much of the grant that they receive has been predetermined by central Government diktat. It is the fact that there is no wriggle room or ability to move the budgets round to meet communities' needs that has created the problem.

Andrew Turner: I have much sympathy for the hon. Gentleman's views, not least because my authorityas he knows, it is led by the Liberal Democrats, even though they are somewhat ashamed to admit itincreased the council tax by a small amount before the most recent local elections and subsequently increased it by massive amounts in the following two years. There is a good case for removing the power of council tax capping, but it is difficult for local authorities to set a rate that is decided locally when they are subject to national pay bargaining and do not have discretion over whether they implement that.

Edward Davey: The hon. Gentleman repeats a point that I was making. Local authorities face such problems even when they are given, as the Government keep saying, grant settlements that are above inflation.
	The Minister must recognise that, because of what is known as the gearing effect whereby authorities raise only a small proportion of their total revenue locally, a 1 per cent. cut in the grant sometimes translates into a 5 per cent. increase in the council tax so as to replace lost revenue. That is one reason for the large increases in council tax. When the gearing effect is added to cost pressures and ring-fencing, that means that the council tax has to rise by a large amount for an authority to meet the demands on it. That is one reason why we oppose the council tax and want it abolished. The other reason is that it is such an unfair tax.
	The Government should not use capping powers even though the council tax is such an unfair tax. They should introduce a policy that would cut the council tax by 100 per council tax payer and use central Government money to fund that. If capping powers were used, there would be arbitrary cuts in services such as education and social services. We do not want that. By providing money from the Treasuryour alternative Budget showed that the Government could do that in the forthcoming Budgetwe could ensure that councils were able to deliver cuts in council tax and maintain services. That is surely a much better approach than going ahead with capping.

Andrew Turner: I am intrigued that the hon. Gentleman believes that the introduction of a local income tax would remove the gearing effect. Surely a local income tax would have to be supported by Government grant in some authorities to a lesser extent than in others. How would that remove the gearing effect?

Edward Davey: The hon. Gentleman is right to pick me up on that. A local income tax gives us the potential to get rid of the gearing effect. Income tax is fairer than council tax. A local income tax would allow us to cut national income tax and increase local income tax penny for penny, so reducing the grant and the gearing effect. It is a mechanism by which we could reduce the gearing effect, although obviously not immediately. Council tax does not provide us with that potential. That is the problem. In the balance of funding review, the Government are trying to discover whether they can put more demands on the council tax, but because the tax is so unfair, it cannot bear that weight. So the gearing effect will never be abolished or even reduced while we have such an unfair tax. By replacing it with a fair tax, we have the chance radically to reform local government finance.
	In most other western democracies, local government finance is not the bugbear that it is in Britain. The prime reason for that is that many of them have a fair local income tax. Their local authorities are able to raise more of their revenue locally and are accountable to the local electorate. We should follow that model. People have been debating it for many years and it is about time our Government faced up to it.

Andrew Turner: I have listened with care to the hon. Gentleman's explanation, but surely a 1p reduction in income tax would reduce the money that the Government receive and they would then reduce the local government grant. A 1p increase in income tax imposed by the hon. Gentleman's local authority would generate far more money than a 1p increase in income tax imposed by my local authority, because people in his area have much higher incomes. How would that reduce the gearing effect?

Edward Davey: The hon. Gentleman is right to make that point. We want to increase the revenue that is raised locally from 25 per cent. to 70 or 75 per cent. That would reduce the gearing effect hugely, but we would always need an equalisation granta redistribution grantfor the reasons that he outlines. We would not want poor authorities not to have resources because they have a lower income tax base. Similar aspects of the grant system have existed before. However, by having a fair tax, such as a local income tax instead of council tax, we would enable that shift to be achieved over time

Mr. Deputy Speaker: Order. I have been generous enough in allowing the debate to be shaped this way. I remind the House that we are discussing a new clause on capping powers.

Edward Davey: You are right, Mr. Deputy Speaker.
	Only time will tell whether the Government will use capping powers this year. I hope that Ministers will tell us that they have decided not to use them. I also hope that the Minister will go further and tell us that, with cross-party support, capping will end altogether. We should take one step towards reviving local democracy and improving local accountability. Let us build on that in the next stage by reforming the local government finance system entirely.

Geoffrey Clifton-Brown: The debate has been interesting and I listened with care. I fully accept that Conservative Governments in the 1980s used capping powers against some of the most profligate authoritiesmostly Labour controlledthat were wasting taxpayers' money outrageously. There was, and is, another problemin some authorities, the majority of council tax payers do not pay the full amount of council tax, so they have an interest in their council providing ever more subsidised services. One could argue that those who pay the council tax in full need the protection of capping. On the other hand, the Conservatives strongly support the principle of devolving as much power as possible to the lowest possible local level. Provided that the ratio of the highest to the lowest band of 3:1 is maintained so that council tax cannot be unfairly skewed to the top band or two, the Government have plenty of powers to force poorly performing authorities to restore their services to a reasonable and cost-effective level. Many more powers, for example, have been given to the Secretary of State in the Bill.
	We have complained about the Bill's centralising tendency, but one consequence is that the Secretary of State has many more powers to deal with councils that overstep the mark, waste money and provide poor services to local people. The Government have powers, including one involving the Audit Commission, over the comprehensive performance assessment and star rating that have been introduced, and ultimately they can send in officials to run council functions or, indeed, the council in cases of grossly incompetent management. Such powers have been exercised over Walsall council. On the other hand, it will be interesting to see what the Government will do about one of the top-performing councilsWandsworth. It would be nonsense if a top-rated council in the Government's new comprehensive performance assessment and star rating were capped because it tried to maintain local services.
	While we fully support the Liberals' aspiration and aim of getting rid of capping, it is difficult to see how they can do so under the Government's unfair and skewed mechanism for funding local authorities. We are keeping an open mind, and I must tell the Liberal Democrat spokesman that although I have considerable sympathy with his new clause, regrettably I cannot support it tonight as we need to consider the matter in greater detail. With those few remarks, I wait with interest to hear what the Minister has to say.

Peter Luff: I have considerable sympathy with much of what the hon. Member for Kingston and Surbiton (Mr. Davey) said when he moved the new clause. Local government functions are effectively controlled from Whitehall and three-quarters funded by it. To meet the targets effectively imposed on it by the Government, my county council is obliged to increase council tax by 14 per cent. or so just to stand still. West Mercia constabulary, one of the precepting authorities, gave a demonstration to hon. Members from Worcestershire, Shropshire and Herefordshire of the impact of the Government's grant, which the hon. Member for Ludlow (Matthew Green) attended. He and I heard a convincing reasons why a 12.9 per cent. increase in the precept was necessary just to stand still.
	I am therefore worried about the capping powers available to the Government. Worcestershire county council could be in an invidious position if the Government used those powers, and might have to cut services, including social services inspection and teachers in schools. Yet it has to impose a monstrously high council tax increase because of the Government's treatment. Quite outrageously, it is between a rock and a hard place.

Geoffrey Clifton-Brown: My hon. Friend is making an important case. His police authority is in exactly the same position as mine in Gloucestershire. It has had to impose a double-digit precept for the past three years because of the funding that it has received from the Government. Had it not done so, the only alternative was to cut the number of police officers in Gloucestershire.

Peter Luff: I entirely share my hon. Friend's concern, and am glad that he made that point. Last year, West Mercia constabulary increased its precept by 33 per cent. to enable it to have a useful increase in the number of police officers on the streets and in the villages of my constituency, but I imagine the Government were tempted to use their capping powers. Large increases are being forced on local authorities, police authorities, county councils and district councils by the Government's funding arrangements, which have skewed money away from leafy shires to northern Labour strongholds. No wonder we see that council tax increases are typically highest in a line south of the Severn and lower north of the Severn. If the Government used their capping powers on authorities such as Worcestershire county council, it would be an outrage.
	Although I have sympathy with the comments of the hon. Member for Kingston and Surbiton, I recognise that there is a need for the Government to have reserve powers to use against outrageously profligate authorities, but not authorities like Worcestershire, which is put in an invidious position by the Government's own policies. If the Minister can reassure us about the use of capping powers this year at least, that would provide some comfort while more careful, calm consideration is given to the long-term future of the powers.

Nick Raynsford: We have had an interesting debate. I can say that as there have now been three speakers. The hon. Member for Cotswold (Mr. Clifton-Brown) described it as an interesting debate after we had heard just one speaker. That raises the interesting intellectual question of whether a debate can take the form of a monologue.
	The fact that the hon. Member for Kingston and Surbiton introduced the new clause today strikes me as bizarre. It is surely a strange sense of timing to choose to make the case for the abolition of capping powers on the day when the Chartered Institute of Public Finance and Accountancy has published provisional figures suggesting that council tax demands from local authorities will be up by some 12.9 per cent. next year.
	At a time when many people all over the country are naturally worried about the prospect of large council tax bills landing on their doormat, it shows an extraordinary degree of insensitivity on the part of the Liberal Democrats to suggest the abolition of capping. That sends a message that anything goes, and indicates that their priority is not the poor council tax payer, but the local authoritythe producer interest, rather than the public. That, I am afraid, is all too often characteristic of the Liberal Democrats.

Edward Davey: Can the Minister tell us how he intends to use the powers this year? Which councils will he cap?

Nick Raynsford: If the hon. Gentleman is patient, I will take him through the policy and its implications. We made our position on council tax capping clear in our 2001 local government White Paper. That built on the Local Government Act 1999, which abolished the crude and universal capping provisions introduced by the Conservatives when they were in government, about which they now clearly feel a little guilty. The hon. Member for Cotswold could not quite bring himself to admit the errors of the Thatcher period, but he clearly indicated a shift in the Conservatives' position.
	We have done away with those provisions and accepted that it was wrong to have those blanket powers, which were used in an insensitive and inappropriate way. However, we retained more selective reserve powers that can be used, if necessary, in cases where local authorities impose an unreasonably high council tax demand. We can cap a budget increase in-year; we can pre-set a maximum budget which an authority can set in subsequent years; or we can set a notional budget requirement against which future years' capping decisions can be taken.
	The hon. Member for Kingston and Surbiton suggested that the Government were being inconsistent in our approach. We are not. We do not wish to use capping powers, but we believe, as any responsible Government should, that it is right to have reserve powers against circumstances where a local authority has behaved in a dubious way and imposed an excessive council tax increase for no good reason. That is the right policy stance to protect the interests of the public.
	As regards this year, we are still waiting for all the information on council tax rises. The CIPFA figures to which I referred are based on approximately two thirds of local authorities. It will be a while yet before we have received all the data for all local authorities. It would be wrong to make any decision on the use of the powers just yet. We do not rule out their use, but we have no current plans to apply the capping powers. We do not wish to use the powers, but we recognise that in certain circumstances that may be necessary. The retention of the powers is important to send a message that local authorities should always act responsibly and should have proper regard for their council tax payersfor ordinary people who have to pay the cost and who would see a bill increasing by rather large amounts, as some, I am afraid, will do this year, as a very serious imposition and a cause of deep concern.
	Looking at the figures for the current year, it is clear that there are some very wide variations in the council tax demanded in different areas. For example, the west midlands has a number of metropolitan authorities that are of roughly similar size and are getting roughly similar levels of Government grant. However, their council tax demands range from 4.4 per cent. in Coventry and Birmingham and 5.8 per cent. in Sandwell and Dudley to 14.4 per cent. in Conservative Solihull. I do not know why Solihull finds it impossible to budget for a modest council tax increase just as Birmingham and Coventry do, given that its grant increase was in line with those received by other west midlands authorities.
	The Tory party has tried to pretend that the Government grant is responsible for council tax increases this year. That is an outrageous suggestion, because this is the first year ever when every local authority in the country has received an above-inflation grant increase. That has never happened before. During the years when the Tory party was in government, councils more often than not saw a reduction in their grants in real terms and sometimes in actual terms. This year, every council in the country has had an increase. The overall increase has averaged 5.9 per cent. in general grant. When special and specific grants are added, the average is 8 per cent. That is a good settlement that is substantially ahead of inflation.

Geoffrey Clifton-Brown: I have heard the Minister repeat that assertion several times on the radio, but it is simply not true. Out of the average increase of 5.9 per cent., at least 3 per cent. has been taken up by Government-imposed taxesincreased pension contributions in respect of advance corporation tax changes, increased national insurance and non-funded increases for public sector employees. Those increases take up 3 per cent. of the 5.9 per cent. average. In addition, many councils have received an increase of only 3.5 per cent. under this Government's settlement. How are they supposed to maintain services with such a grant increase and such increased costs?

Nick Raynsford: I am surprised that the hon. Gentleman can bring himself to say that with a straight face. When his Government were in power, councils got cuts in the grant. They saw reductions and cuts, but while this Government have in been in power local authorities have seen year-on-year grant increases. This year, they are getting an increase averaging 5.9 per cent. in general grant and 8 per cent. when specific grants are taken into accounta total of 3.8 billion. Let me deal with one or two of the points that he raised about that. Does he know how much is taken up by national insurance?

Geoffrey Clifton-Brown: Roughly, out of the 3 per cent. cost increase that I have just mentioned, 1 per cent. relates to the issue of ACT and pension contributions, 1 per cent. to underfunded public sector pay increases and 1 per cent. to national insurance changes. Those costs mean that 3 per cent. of the Government's so-called 5.9 per cent. average increase is immediately taken up. Furthermore, they do not fund the amounts passported through education. How are local authorities supposed to maintain services without increasing council tax?

Nick Raynsford: In an earlier debate, the hon. Gentleman gave us an interesting insight into his mathematical skills by suggesting that an increase of 5p a week was equivalent to an increase of 25 a year, rather than 2.50 a year. [Laughter.] That is true; it is an indication of just how out of touch the Opposition are. He is out of touch once again in respect of the figures that he has just given to the House. The total increase attributable to national insurance increases is 230 million, which compares with 3.8 billion of additional grant. That is the reality. That is what the Tory party is trying to hide, as it is Tory authorities that are increasing council tax unreasonably this year. When the full analysis is carried out, he will have to explain why Tory councils are making the largest council tax increases by far this year. It is not because of the grant. As I have pointed out, many Tory councils have received a very similar grant to that received by Labour councils, and they include Solihull, which, although its grant is similar to that of Labour Birmingham or Coventry, has introduced a council tax increase of four or five times the size. Why is that? Why is Tory Wandsworth, which reduced its council tax by 25 per cent. last year an election yearimposing a 55 per cent. increase this year? Tory authorities are taking such cynical action because they are trying to blame the Government for their decisions.

Andrew Bennett: What would be the implication for local councils of the 20 per cent. cut in public expenditure that Conservative Members are considering?

Nick Raynsford: My hon. Friend, who chairs the Office of the Deputy Prime Minister: Housing, Planning and Local Government Committee, knows only too well that if the Conservative party ever came back to power, we would return to the days of cutting Government grant year after year. A Conservative Government would do that even more savagely if they fulfilled their leader's pledge and made a 20 per cent. reduction in overall public expenditure. A 20 per cent. reduction in council grant would lead to huge increases in council tax.

Peter Luff: Indeed, it would. However, there is no such plan and I wish that the Government would stop talking such nonsense.
	Will the Minister do Worcestershire county council the kindness of accepting a delegation from the relevant portfolio holder and the director of finance and reassure them that spending will be not be capped? Receiving such a delegation would enable him to understand why the council is obliged to increase its council tax by so much simply to deliver standstill services.

Nick Raynsford: It is slightly odd that the hon. Member for Mid-Worcestershire (Mr. Luff) takes that view. Worcestershire county council has received a 6 per cent. grant increase from the Government. That is more than twice the level of inflation. There is no basis on which a council that receives that amount of grant can justifiably claim that it has no option but to impose an unreasonably large council tax increase.
	If one considers the council tax that different local authorities set this year, one realises that it is possible for prudent and sensible authorities to budget in a way that does not impose unreasonable demands on their council tax payers. Let me tell the hon. Gentleman, who is so keen to support the county councils, a few home truths. Two years ago, in an election year, the average increase in county councils' council tax was 6 per cent. Last year, when no elections took place, it increased to 9 per cent. This year, the provisional figures suggest that increases will be 13 per cent. That is far greater than the increases of most other authorities.
	Why does that happen? County councils have the same social services and educational responsibilities as other authoritiesI referred to some in the west midlandswhich have set substantially lower council tax increases. There is no good reason for unacceptable council tax increases.
	Earlier, I referred to Wandsworth, but let me give one more example to kill for ever the myth that Government grant is somehow responsible for council tax rises in a year when all councils have had an increase in grant that is above inflation. The district council of Weymouth and Portland in the south-west threatens to impose a council tax increase of more 50 per cent. Yet Government grant to that authority has increased by 12.5 per cent. What does it need to avoid imposing an unreasonable increase on its council tax payers? It raises serious questions if 12.5 per cent. is not a sufficient increase on which to budget prudently.
	All the evidence suggests that authorities can budget prudently. This year, authorities that are getting good Government increases should be able to impose a council tax demand that is not unreasonable.
	Against that background, it is clearly inappropriate to accept the amendment this year. As I have already made clear, we do not wish to use capping powers. We want local authorities to budget but we expect them to act prudently. We cannot turn a blind eye to authorities that not only impose unreasonable tax increases on their residents, but act in a way that appears to be motivated by electoral considerations or profligacy. Every hon. Member should condemn that.
	The hon. Member for Kingston and Surbiton must surely have learned a lesson from the fate of Richmond upon Thames council, which last year had an unenviable reputation for imposing the highest council tax of any authority in the country. Not surprisingly, the Liberal Democrats no longer control Richmond upon Thames council. I therefore put it to him, in the nicest possible way, that it might be in the interests of his party if he were to take a more prudent and rigorous attitude towards those members of his party who do not believe that they have a responsibility to moderate their council tax demands. If we do not send out from this House the message that we expect local authorities to act prudently, the public will take a very dim view of our responsibilitiesour serious responsibilitiestowards the ordinary people who ultimately have to pick up the tab.
	We cannot accept the new clause. I hope that the hon. Gentleman will withdraw it and send out a message that authorities should act prudently and responsibly.

Geoffrey Clifton-Brown: Ministers will not blind council tax payers with science. Even The World at One today ran an item on whether the Government were skewing the local government finance distribution system through resource equalisation, taking money away from prudent and well-run southern councils to give it to their friends in the north. People are tumbling to that, and they will certainly tumble to it when council tax bills fall through their letterboxes.

Nick Raynsford: The hon. Gentleman seems to believe that the louder he shouts, the better his chance of persuading people. I have to tell him that usually the opposite is trueif one has a sound and strong case, one needs only to put it across in a sensible and modest voice. In a year when every local authority in the country has had an above-inflation grant increase, there is no justification for some of the profligate council tax demands that are coming through, particularly from Conservative authorities. I am surprised that the hon. Gentlemanwho, in his opening remarks, referred to the Government of the party of which he is a member taking action in the 1980s against councils that, in his view, were acting unreasonablycannot bring himself to condemn those Tory authorities that are imposing wholly unreasonable council tax increases on their residents.
	We cannot accept the new clause. I hope that the hon. Member for Kingston and Surbiton will withdraw it, but, if not, that the House will reject it.

Edward Davey: I am afraid that the Government's argument will not wash with the electorate. They know that the blame for many of the high council tax rises lies with this Government. It is not good enough for the Minister simply to say that every council has had an above-inflation increase. He should look at analyses that show the effects of ring-fencing, or of the passporting requirement that his colleague, the Minister for School Standards, imposed in respect of the education grant on the ability of councils to manage their budgets. The right hon. Gentleman knows, because he will have heard many local authority councillors and council officers make this argument, that although they may have had an increase, their ability to manoeuvre in using that money has been sorely limited. Therefore, in areas where they have not had sufficient grant, where there are huge demands and huge cost pressures, they are having to make good the lack of grant through council tax increases. The Minister knows that, owing to the effects of gearing, a small shortfall in grant revenue means that council tax has to increase significantly to make amends. His argument does not wash under analysis and it will not wash with the electorate.

Andrew Bennett: To make it clear, it is Liberal policy, then, to make sure that some of the extra money that was to go to education does not go to education. Can the hon. Gentleman tell us which schools will face the cuts that will result from that policy?

Edward Davey: The hon. Gentleman makes a typical centralist argument. As the normally very good Chairman of a Select Committee, he should be ashamed of doing so. His Committee is supposed to stand up for local government, and the whole point about local government is that local democracy should determine such issues, not Ministers in Whitehall. He should be aware that there was a huge row in Whitehall when the Minister for School Standards sent a letter to every head teacher in the country telling them exactly how much money they should expect from their local education authority, because that was not the message that was coming from the Office of the Deputy Prime Minister. When Ministers are quizzed about that, they are very embarrassed by what their colleagues in the Department for Education and Skills said. The hon. Gentleman's Committee made that very point, so he ought to know that. He should also know that this problem will not go away until the Government refund the local government finance system more effectively.
	The Government will have to come clean in the next few weeks. When they have the full figures, rather than the two thirds that the Chartered Institute of Public Finance and Accountancy reported on today, they will have to decide whether they are going to use the capping powers. The Minister gave us no real answer, but what he did say is that they do not really want to. If they do not want to, they should accept new clause 19. They should return to what they said in oppositionthat capping powers are undemocratic and unfair, and that the judgment on how a council is performing in managing its budget should be made by the electorate, not in Whitehall.
	We will not withdraw the new clause. We will push it to a vote, and I hope that hon. Members on both sides of the House will consider whether they believe local democracy to be important. If they do, I hope that they will vote to get rid of these centralised capping powers, which have been on the statute book for far too long

Mr. Deputy Speaker: Order. I think that the hon. Gentleman has made his point clearly.

Question put, That the clause be read a Second time:
	The House divided: Ayes 46, Noes 290.

Question accordingly negatived.

Geoffrey Clifton-Brown: On a point of order, Mr. Deputy Speaker. The Government have timetabled this afternoon's proceedings in such a way that we have discussed only six out of the 13 groups. We have had no opportunity for the Minister to put on record what Government amendment No. 24 is all about, and therefore I request on behalf of the Opposition a separate vote on it, so that we may have an opportunity in future to discuss that matter.

Mr. Deputy Speaker: I am prepared to concede a vote on that matter. It will follow immediately.

Clause 77
	  
	Statutory Revaluation Cycle

Amendment proposed: No. 24, in page 40, line 10, leave out 'each House of Parliament' and insert 'the House of Commons'.[Mr. Raynsford.]
	Question put, That the amendment be made:
	The House divided: Ayes 269, Noes 176.

Question accordingly agreed to.

Clause 32
	  
	Ancillary Powers

Amendment made: No. 33, in page 15, line 4, leave out subsection (2).[Mr. Raynsford.]
	Bill, as amended in the Standing Committee, to be further considered tomorrow.

Philip Hammond: On a point of order, Mr. Deputy Speaker. During the Committee stage, the Government tabled what is now clause 118, which will be considered by the House on Monday. At that time, the Minister for Local Government and the Regions was unable to provide the Committee with draft guidance and indicated that he hoped to be able to do so by the Report stage. The Opposition have tabled an amendment that would remove clause 118, but we did so only for the purpose of creating an opportunity for a discussion of the draft guidance on the Floor of the House. Have you, Mr. Deputy Speaker, received any indication that such draft guidance will be available before Monday's debate?

Nick Raynsford: Further to that point of order, Mr. Deputy Speaker, it may help the House if I indicate to you, as I have done privately to the hon. Member for Runnymede and Weybridge (Mr. Hammond), that I have written to him and the hon. Member for Kingston and Surbiton (Mr. Davey), sending them the guidance, and I intend to make it more widely available by placing copies in the Library and by giving a copy to any hon. Member who would like to see one before next week's debates on the Local Government Bill.

Anthony Steen: rose

Mr. Deputy Speaker: Order. I am obliged to both the hon. Gentleman and the right hon. Gentleman. No further ruling from me is required.

David Heath: On a point of order, Mr. Deputy Speaker. During Monday's sitting, when we were discussing the prevention and suppression of terrorism, the Home Secretary said:
	I do not believe that there is a problem with people approaching their general practitioner for the smallpox vaccination.[Official Report, 3 March 2003; Vol. 400, c. 596.]
	The Select Committee on Science and Technology has just heard evidence from, among others, the British Medical Association and the Royal College of General Practitioners, which said that that is not the case, cannot be the case, and should not be the case, and suggested that the reference by the Home Secretary should be retracted. Has the Home Secretary indicated to you, Mr. Deputy Speaker, whether he intends to come to the House to make such a retraction, because it is very important that clear advice be given on those important counter-terrorism matters?

Mr. Deputy Speaker: The short answer is that no such approach has been made, but the issue that the hon. Gentleman raises, however serious, is a matter for debate, and I am sure that it can be pursued in other ways now that he has put it on the record.

Anthony Steen: On a point of order, Mr. Deputy Speaker. Forgive me for interrupting while you were on your feet; I thought that you were about to sit down any second. Please forgive me for any discourtesy.
	I want to raise with you, Mr. Deputy Speaker, the question of the ministerial door that leads from the Star Chamber Court up the back entrance to the Table Office. As a matter of course, that door is always open during Divisions. It was not open this evening. I am afraid that, with this modern technology, a lot of the plastic cards do not work effectively. I came a long way for that Divisionfrom Norman Shaw Northbut I had to miss the vote because the door was locked. I wonder whether you could ensure that that door is left open in future, as it has been in the past.

Mr. Deputy Speaker: I am sure that we are all very pleased to see the hon. Gentleman now. [Hon. Members: Hear, hear.] I will ensure that the matter is investigated by the Serjeant at Arms, so that Members are not obstructed in future.

CRIMINAL JUSTICE BILL (PROGRAMME) (NO. 3)

Motion made, and Question put forthwith, pursuant to Orders [28 June 2001 and 29 October 2002],
	That, in accordance with the Resolution of the Standing Committee of 4th March 2003, the programme order of 4th December 2002 in relation to the Criminal Justice Bill shall be further varied as follows
	Consideration and Third Reading
	(1) Paragraphs (4), (5) and (6) of the Order (Consideration and Third Reading) shall be omitted.
	(2) Proceedings on consideration and Third Reading shall be concluded in three days and shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on the last of those days.[Derek Twigg.]
	Question agreed to.

DELEGATED LEGISLATION

Sea Fisheries (Restrictions on Days at Sea)

Ordered,
	That the Sea Fisheries (Restrictions on Days at Sea) Order 2003 (S.I., 2003, No. 299), be referred to a Standing Committee on Delegated Legislation.[Derek Twigg.]

COAL INDUSTRY SOCIAL WELFARE ORGANISATION

Motion made, and Question proposed, That this House do now adjourn.[Derek Twigg.]

Michael Clapham: I am pleased to have been successful in obtaining this Adjournment debate, and I am glad that my hon. Friend the Minister for Energy and Construction will reply, because he is sympathetic to mining communities and he has been very helpful in obtaining the current aid package for the mining industry.
	This debate is about the Coal Industry Social Welfare Organisation and its funding. CISWO, as I shall refer to it, came into being after 1 January 1947, when the industry was nationalised. Although a mosaic of welfare and social provision had existed previously, CISWO brought it together and was able to roll out the provision right across the United Kingdom coalfields.
	CISWO has a national framework, with a regionally devolved structure, fitting the organisation into different coalfield cultures in a way that allows it to engage with the community. It offers advice and help to those who organise the welfare facilities and ensures that management skills are on hand to assist local initiatives. In addition, CISWO organises local initiatives and helps to organise sports and brass band concerts, as well as providing bursaries for the sons and daughters of miners and former miners who go on to further or higher education.
	Perhaps the most important services provided by CISWO are those for the disabled and frail in the mining communities. It administers the miners' paraplegic centres and provides assistance and counselling for their families. The organisation's social workers assist ageing and disabled miners and their widows; 19 social workers work for it within the UK coalfields, and CISWO social workers now carry out about 10,000 visits a year, in response to a range of issues such as poverty, ill health, bereavement, social exclusion and income maximisation. Those services are invaluable to mining communities.
	I remind the House that the coalfield communities stretch from Scotland through the north-east, the Midlands, south Wales and Kent, and that the population of those mining communities is about 5 millionroughly equal to the population of Scotland.
	Much has been done to regenerate and renew former coalmining communities, but there is still a long way to go. Many of the men who were made redundant after the economic dislocation caused by the colliery closures in the 1980s and 1990s have never found employment. Indeed, a report published some time ago by the Coalfield Communities Campaign suggested that 44 per cent. of miners made redundant at that time had not found alternative employment. That creates social problems of its own, which are peculiar to mining communities, and CISWO helps them deal with some of those.
	The deep coalmining industry has left mining communities with a legacy of disability. I know that the Minister has been extremely helpful in ensuring that the COPDchronic obstructive pulmonary diseasescheme has made money available. Although when the scheme was first initiated and the lawyers devised the handling agreement it was extremely problematic, my hon. Friend has worked hard to ensure that the scheme has been made practicable, and money is now coming through to the mining communities.
	Nevertheless, the high level of disability imposes a burden on local authority social services, which find it difficult to provide, often to remote communities, the kind of specialist help that former miners and their families require. I should point out that the coalmining industry is not an urban industry but a rural one. Many of the small communities dotted around the towns require the special help that CISWO provides.

David Hamilton: Does my hon. Friend agree that now that there is not one deep mine left in Scotland, CISWO's role is more important than ever? When the pits were still running, we had trade unions and miners clubs that could organise in local communities, but these days CISWO's role is unique. It fills the gap, and delivers the information that it is so important to let people know.

Michael Clapham: That is a relevant point. When collieries close, the service provided by CISWO becomes more important.
	Let me give the Minister an example from my community that highlights the degree of disability. The local economy in Barnsley was dependent on coal mining, and little diversification took place through the 1980s. Of course, when economic dislocation occurred as a result of colliery closures, enormous job losses followed. It had always been known that there was a high degree of disability in the Barnsley community. In 1997, the local authority carried out a survey in the town that showed that nearly a third of households in the borough had a disabled person: generally, a father or a grandfather crippled with a respiratory disease as a result of working for years underground. CISWO provides special services for those families. Many of the former miners and their families live in mining villages that are dotted around outside the town. They often require the specialist assistance that, I feel, only CISWO workers can provide.
	As the Minister will be aware, following a successful campaign in 199394 at the time of coal industry privatisationa campaign that was actively supported by many Labour MPsCISWO was preserved. The then Conservative Government provided, through British Coal structures, a 10 million endowment fund, and a 2 million special expendable fund was also made available. The mining companies that had bought the British Coal mines augmented that: they were contractually obliged to provide 1 million per annum of revenue income for a maximum of five years.
	As my hon. Friend the Minister is aware, for the last three years CISWO has been in discussion with the Department of Trade and Industry, which is responsible for British Coal, about the need for it to revisit the initial funding package. In the autumn of 2002, the Department announced that it was prepared to make 200,000 per annum available for three years, in recognition of some of the historical liabilities that CISWO would inherit from British Coal, particularly those concerning the appointment of local trustees of mining charities. It is clear from what I have said that the Department's offer to CISWO is inadequate to enable it to maintain the services that the UK's mining beneficiaries desperately require. Using figures from both mineworkers' pension schemes, there will be about 300,000 beneficiaries in that area. CISWO services are therefore badly needed by that group.
	CISWO has engaged with many Government initiatives such as the one on lifelong learning. It has been working in mining communities to tackle social exclusion and social enterprise, as well as helping with capacity building. That is in addition to the work carried out by social workers to which I have referred. The organisation's operational staff also work closely with the trustees of local mining charities, of which there are more than 350. Recently, many of those have launched initiatives of the type needed in mining communities, some of which involve miners' institutes providing IT classes. Some of those IT classes are being attended by three generations of former mining families. In addition, other educational opportunities, luncheon clubs, crches and after-school clubs are provided, all of which are special services required in communities that are adjusting to renewal.
	The coalfield taskforce report, as my hon. Friend the Minister will be aware, set out 80-odd recommendations for regeneration and renewal of mining communities. Besides setting up the Coalfields Regeneration Trust, the report set CISWO the challenge of developing mining charities as one-stop shops. There has been a magnificent response to that challenge, and in the last five years CISWO has accessed more than 37.5 million from external funders for community development projects. CISWO has done more than any other single organisation to help to redress the problems facing coalmining communities by dealing with their needs and through local capacity building and developing social enterprise. Funding CISWO provides value for money. The figures that I have mentioned show that it is levering more into mining communities.
	CISWO has enormous social and economic value to mining communities. Over the years, it has become indispensable in addressing the needs of former miners and their families and in assisting the rebuilding of mining communities. It is difficult to understand thereforeperhaps my hon. Friend the Minister will refer to thiswhy the Government are not supporting the organisation.
	I have referred to the contractual commitment of the mining companies to CISWO when the industry was privatised. The cessation of that commitment has resulted in CISWO losing half its annual income. The reserves that it had built up have been used, particularly in the period of the long discussions with the Department of Trade and Industry about funding. So desperate has the situation become that the trustees met last Friday and decided that, given the lack of funding, they had no alternative but to consider a plan for reducing service provision to beneficiaries and mining communities to less than half its current level. This is extremely disappointing and will impact detrimentally on mining communities at a time when the demand for service provision is increasing.
	Mining communities are aware that the package put in place by the Conservative Government at the time the industry was privatised was worth 17 million. Since then, CISWO has been offered just 600,000 over three years. That is despite the enormous amount of money that it has levered into mining communities to support community projects.
	I know that my hon. Friend is sympathetic to mining communities, but the situation is gravely disappointing and the consequences of the DTI not properly funding CISWO will be paid for by mining communities and by the sick, the disabled, and the disadvantaged in those communities. CISWO provides an invaluable service to the mining communities and former mining communities of the UK, and I urge my hon. Friend to reconsider the Department's stance on this issue and to make the necessary funding available for CISWO to maintain its previous level of service provision.

Brian Wilson: I congratulate my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) on securing this debate. I welcome it. As is often the case with Adjournment debates, it provides an extremely useful vehicle for focusing on an issue of real concern.
	The issue is familiar to me, as it will be to all the Labour Members present. For the sake of the mining communities who will study the debate, may I point out that only Labour Members are present? That is as one would expect. I fully understand the interest in CISWO's future, so I am pleased to have the opportunity to explain the current position to the House. I shall obviously take account of my hon. Friend's eloquent remarks.
	I certainly appreciate and recognise the important work that CISWO has done over a long period. We are not discussing the desirable ends for mining communities, as we all agree about the desirability of regeneration and the valuable activities that CISWO has carried out. Instead, we are talking about the mechanisms of delivery, and I shall detail later that, since 1997, the Government have put in huge sums of money under different headings to these communities. We are dealing with the narrow question of CISWO's role in delivering that and the nature of the services that it provides. I could not help noticing that, almost without exception, the activities listed by my hon. Friend share the characteristic that they are not the responsibility of the Department of Trade and Industry.
	CISWO is a product of nationalisation. It was established as a limited company under the Miners' Welfare Act 1952. The funding and functions of earlier organisations, which had a less comprehensive network, were transferred to the umbrella of CISWO. Besides providing direct services to miners in their communities, it presided over the network of more than 400 miners' welfare schemes, including miners' institutes and recreation and social centres. It was also involved with welfare committees, trusts, funds and convalescent homes.
	The funding for CISWO's activities was allowed under section 13 of the 1952 Act. The National Coal Board, and latterly the British Coal Corporation, made payments to CISWO which allowed it to meet the costs of carrying out its activities. Up until 1987, British Coal's annual contribution to CISWO was in the region of 2 million per annum. In 1987, an agreed scheme provided that its funding would take the form of a levy on British Coal's production at 2p per tonne of total output of saleable coal. British Coal, CISWO and the mining unions were party to that scheme, which continued up to the privatisation of the coal industry in 1994. CISWO also derived other income, mainly from grant aid from outside bodies, interest receivable and recovery of social work costs.
	My hon. Friend accurately portrayed CISWO's history. At the time of privatisation, CISWO became a charitable trust and consideration was given to how it might continue post-privatisation. A financial package was put together that allowed CISWO to continue with its activities in the mining communities. That was in two parts: British Coal, not the Government, provided a cash endowment totalling 12 million, and a covenant arrangement was put in place whereby the successor companies would provide CISWO with funding of 1 million a year up to and including 1999. That made a total of 17 million, which is not an insubstantial sum in a period of transition. The package up to 1999 was designed to give CISWO the time, resources and manoeuvrability in which to build up its grant and fundraising capabilities in the charitable sectorsomething that it had been unable to do as a company.
	Over the years, CISWO's main activities have changed and evolved. They now include assisting coalfield communities to access other funding streams, such as the regeneration programmes, while continuing to support miners' welfare organisations and undertaking social work-type activities in coalfield areas. Its role is inevitably a response to the way in which the mining industry has changed and contracted. It is true that, over the past two years, CISWO has approached the DTI for new funding of 1 million a year to replace what was previously provided by the post-privatisation employers. I have met Vernon Jones from CISWO, as has my right hon. Friend the Deputy Prime Minister. I am aware that the organisation is having difficulty in generating funding to cover its costs, including its support for regeneration-related activities. Perhaps I should clarify that CISWO intends to protect, and is able to protect, its core social work functions.
	The issue is not new. All Governments have limited budgets. On that basis, we are unable to continue to provide the 1 million a year that CISWO wants. However, I am able to provide support for CISWO's activities that relate specifically to those unique responsibilities that it performs in relation to the management of miners' welfare trusts which might otherwise fall to the residual British Coal contribution.

David Hamilton: The Minister spoke earlier about the miners' convalescent homes, which are a big asset to CISWO. Numerous people in Midlothian and throughout Scotland use those homes. If CISWO is forced into a position where it has to look at its own resources and sell off assets to try to keep its service going, those homes could be a casualty. Will the Minister assure us that that will not be allowed to happen?

Brian Wilson: I certainly do not want CISWO to be forced to sell convalescent homes. My information is that CISWO can protect its core functions and social provisions under the proposed financial arrangements. If that is not the case and if I am told authoritatively that it is going to be forced to sell convalescent homes, I shall certainly look at that, but I obviously need hard information rather than a hypothesis. We have offered 200,000 per annum for three years, which would enable the organisation to develop and put in place a long-term strategy to deal with the issues and responsibilities that I have described.
	My hon. Friend the Member for Barnsley, West and Penistone rightly spoke about CISWO's role in regeneration activities, for which huge amounts of money are available. The Coalfields Regeneration Trust has approved grants of over 40 million to more than 500 projects to support coalfield communities. The national coalfields programme has a budget of over 390 million, which is currently creating 3,680 jobs. The sixth round of the single regeneration budget awarded over 180 million to 16 schemes in coalfield areas. We have allocated an extra 28 million over three years to local authorities to tackle housing problems in coalfield areas.
	That is an area where there is no disagreement. My hon. Friends who are here tonight have been extremely active in making representations on behalf of the coalfield communities. In response, the Government have introduced all those programmes that are of benefit to coalfield and former coalfield communties. I therefore emphasise that it is not about money. If we are going to start talking about all the money that has gone to coalfield communities, I would point out that coalfield health schemes are enormous and unprecedented. We are talking about a narrow subjectCISWO's role in the midst of that activity.

Dennis Skinner: If it is not about money, what is it about? We are talking about a third of the Lord Chancellor's furnishings. Every morning, you used to pay a sum of money into CISWO, but that has all gone now, except for about 7,000 or 8,000 people. It is not only the contribution from the old Coal Board, it is the miners' money as well. We even have a post office in a miners' welfare office in my constituencyit came up with an offer when the post office closed. It also looks after paraplegics. We are not talking about a great sum of money. Will my hon. Friend remind the Chancellor of the Exchequer of the millions of pounds that go to the Treasury as a result of the 50 per cent. clawback from the miners' pension fund? We are asking for a tiny bit. Yes, the Government have ploughed money in, but I urge them not to spoil the ship for a ha'p'orth of tar. Let us get that little bit of money that we need for CISWO.

Brian Wilson: I was relieved to hear my hon. Friend suggest that we approach the Chancellor of the Exchequer and not the Lord Chancellor. I am alert to the point that he madea lot is going in, but some things are more difficult to do and justify than others. It is not as if we are turning our back on CISWOwe are offering 200,000 a year. It is not as if the functions that have been described will not be funded in other ways, including the substantial provision from the Government that we all agree is justified.
	I do not regard the purpose of our debate as putting the lid on this. I am listening to the arguments.

Dennis Skinner: The Minister is not putting the lid on, and the ink is not dry.

Brian Wilson: I never put the lid on things; the lid is never on till the fat lady sings.
	There is a real debate to be had. I responded to the point about convalescent homes, for example. If I thought for a moment that such work was in danger, I would be every bit as concerned as everyone else. To some extent, CISWO must look to itself. It is not as though the present situation has crept up on it. There was never any understanding, as far as I am aware, that the 1994 settlement was a guarantee of 1 million a year continuing. With that sort of notice, CISWO has had the opportunity to transform itself, as other organisations have done, into a body that accesses money on its own behalf, as well as accessing money for mining communities.

Kevin Barron: My hon. Friend says that he would re-examine issues such as convalescent homes if they ever came under pressure. We all appreciate that. CISWO runs many organisations. In my constituency, in the village where I live, there is the Maltby widows' club. Those are all miners' widows. CISWO runs an administrative service for such clubs. There is every likelihood that that club would fold if it did not get that service, which CISWO has been providing for decades in coal communities, although probably no one knows about it. I hope that my hon. Friend will keep his eyes open to all the activities that may come under pressure as a result of the reduction in funding.

Brian Wilson: I hear what my hon. Friend says. I am sure that my hon. Friends would agree that it is a bit odd that all those activities, which are not specifically mining-related or DTI-related activities, are funded by a grant from the Department of Trade and Industry. We have said that we will continue to provide money for those functions that are specifically related to the responsibilities of the DTI. Perhaps we should all work on other potential sources of funding. Ultimately, nobody is interested in where the money comes from, as long as it is available to sustain activities that I recognise are necessary in mining communities.
	At a time when so much has properly gone into mining communities, as the nation repays its debt to mining communities, I do not want the positive outcomes and impressions to be negated, as my hon. Friend the Member for Bolsover (Mr. Skinner) suggested, because of a grievance. We all know that there are small historical issues that continue to niggle away. We have tried to deal with them one by one, in a way that is fair and which addresses past problems and past history in the industry. Our position is that 200,000[Interruption.]
	Perhaps I should move on. I recognise that a number of organisations, including
	The motion having been made after Seven o'clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.
	Adjourned at seven minutes to Eight o'clock.